SWIFT Completes Tests For Euro Stablecoin In Bond Payments

• SWIFT has successfully used the EURCV euro stablecoin to settle tokenised bond transactions.
• The trial proves that current bank messaging systems can work well with blockchain assets.
• Meanwhile, SG-Forge created the first MiCA-compliant stablecoin that is natively compatible with SWIFT.

Financial technology is moving faster than ever as institutions continue to embrace blockchain. The international messaging network SWIFT recently finished a major trial involving a euro stablecoin to settle tokenised bonds. 

This project was a joint effort with SG-Forge (the digital arm of the French bank, Société Générale). Together, they showed that traditional banking systems and new blockchain technology can communicate with each other.

How the Euro Stablecoin Trial Improves Bond Settlements

Tokenisation is the process of turning physical assets into digital tokens on a blockchain. 

In this test, SG-Forge used its euro stablecoin (known as EURCV), to handle payments for digital bonds. The experiment covered the entire life of a bond, including the initial issuance, delivery-versus-payment settlement, coupon payments and final redemption. 

When using a stablecoin, banks achieved much faster settlement times than with traditional methods.

Under normal circumstances, bond settlements often take several days to complete. However, using a euro stablecoin on a shared ledger allows transactions to happen almost instantly. 

SG-Forge initially launched the EURCV coin on the Ethereum network in 2023. This coin is special because it follows the Markets in Crypto-Assets (MiCA) rules in Europe.

It is also the first regulated digital asset designed to work directly with SWIFT infrastructure. This compatibility means banks do not have to replace their entire system to use crypto.

Interoperability Between SWIFT and Blockchain Platforms

In this scenario, interoperability is a fancy way of saying different systems can work together. SWIFT handles millions of messages between banks every day and its goal is to make sure these messages can move money across different blockchains. 

During the trial, SWIFT acted as an orchestrator. It moved data and value between existing payment systems and the new digital ledger. This role is important for institutions that want to start using digital assets without taking on too much risk.

In other words, by proving SWIFT can handle multi-platform transactions, the company is giving its customers more confidence, and they can now experiment with digital assets at a much larger scale.

The Role of MiCA Compliance

Regulations are often a big deal for banks looking to use crypto. However, the EURCV euro stablecoin meets all the requirements of the European MiCA framework. 

This compliance makes it a “safe” asset for institutional use. SG-Forge also provided its open-source standard, called Compliance Architecture for Security Tokens (CAST), for the project. 

This architecture ensures that every digital bond and stablecoin transaction complies with the strictest legal requirements. Because EURCV is pegged to the euro, its price remains stable at all times. 

Moving Toward a Shared Digital Ledger

SWIFT is not stopping at just one trial. The organisation recently announced plans to add a blockchain-based ledger to its infrastructure late last year. 

This project involves at least 30 major banks from all over the world, and the focus is on creating a system for real-time, 24/7 cross-border payments. 

The prototype for this ledger also started with help from the software firm Consensys.

In all, this removes the need for human middlemen in many parts of the payment process, and SG-Forge is one of the main partners in this. 

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