SWIFT allegedly partners with big banks to test on-chain transactions using Linea

SWIFT is reportedly planning to test payment transactions and messaging on-chain in partnership with over a dozen big banks, using the Ethereum Layer-2 network Linea.

SWIFT plans to test payments and messaging infrastructure on-chain using Linea

Global financial messaging co-operative SWIFT is planning to experiment with putting its core messaging framework on-chain in collaboration with more than a dozen major institutions, according to a report from The Big Whale on Friday.

The institutions, including banks BNP Paribas and BNY Mellon, have chosen the Ethereum Layer-2 network Linea for the project. The use of the Linea network highlights its focus on privacy through its ZK rollup.

Linea is an Ethereum rollup designed to provide lower gas fees, higher throughput, and faster transactions through its advanced zk-rollup technology.

The report, citing a source from one of the banks, stated that the project will take months to complete but could bring about a major technological shift in international interbank payments.

SWIFT hinted on Thursday that it is developing new rules with a coalition of more than 30 early-adopter banks to establish a standard for cross-border payments by consumers and small businesses.

The initiative aims to enhance the cross-border leg of payments, where progress has already been made. It also seeks to reduce delays in the "last mile," the domestic stage of transactions that accounts for 80% of the total time due to local regulations and infrastructure.

The co-operative had announced in October last year that banks in North America, Europe and Asia had begun live testing of digital asset transactions over its global messaging network. 

The testing aimed to link digital and traditional currency platforms through Swift's infrastructure, enabling cross-border transactions in both fiat and digital currencies.

The use of Linea could signal progress in SWIFT's plan, although there has not been any official word to confirm the claims.

The move further reflects the traditional financial sector's shift toward digital assets over the past few months, as regulatory pressures have eased globally.

The US enacted the GENIUS Act in July to regulate stablecoin activities across the region. Additionally, nine EU banks are planning to launch a Euro-backed stablecoin that complies with the Markets in Crypto Assets (MiCA) regulation.