The global banking cooperative SWIFT has published an analysis of its recent proof of concept that was based on the IBM Hyperledger Fabric v1.0 DLT platform.
While it is too early for the cooperative's entire network of banks to adopt a DLT solution, SWIFT representatives were extremely pleased with the results of the sandbox test.
On March 8, the financial cooperative SWIFT, which has about 11,000 member banks, issued a press release proclaiming the success of its recent attempt to use Hyperledger's Distributed Accounting (DLT) technology to "support automated monitoring and reconciliation. of liquidity in real time. "
The proof of concept (PoC), which SWIFT calls "one of the largest and most ambitious DLT trials", aims to test the effectiveness of distributed books authorized in the reconciliation of accounts.
Nostro, which are bank accounts belonging to a bank that exist in books of different banks. This involves two banks that are located in different countries and, therefore, handle different currencies.
The security enclosure project investigated whether DLT, together with SWIFT assets, "would comply with the requirements of industry control, security and data privacy."He also sought to determine at what point the DLT would be able to service the SWIFT members.
According to the press release :
"The technology allowed the handling of events in real time, updates of the status of transactions, complete audit trails, visibility of expected and available balances, confirmation of simplified account entries in real time, identification of pending entries and possible related problems. , and also generated the data required to support the regulatory reports. The PoC also demonstrated the significant progress that distributed accounting technology has made with respect to data confidentiality, governance, security and identification frameworks. "
An analysis of the PoC, also published by the cooperative, relates that the consensus process requires that both parties involved in a transaction approve it, and that SWIFT must also "verify" each operation.
34 banks participated in the PoC, each with its own node, and 528 channels were created to ensure that certain private data were not shared with the entire sandbox.To make the solution capable of full service to the SWIFT network, it would be necessary to establish and maintain some 100,000 of these channels, which would cover all existing Nostro relationships and present significant operational challenges. "
Another obstacle to overcome is the need for participants in a DLT-SWIFT system to "migrate from processing and reporting batch liquidity in real time while administrative applications would need to be updated to feed the platform with new information in real time."
Anyway, the press release suggests that, collectively, the assets of DLT and SWIFT can provide "the necessary basis for multi-bank financial applications". The cooperative committed to working with its members to overcome some of the barricades that inhibit the adoption of DLT throughout the network.
"Overall, the PoC was extremely good, which shows the fantastic progress that has been made with DLT and the Hyperledger fabric in particular," Damien Vanderveken, head of research and development at SWIFT.
Platform Leader Stephen Gilderdale said that SWIFT had already embarked on other PoCs and that the agency would continue to explore solutions to help members benefit from blockchain services, whether offered by SWIFT or by third parties, on a secure platform and confiable".
SWIFT chose the Hyperledger platform in part because it supports intelligent contracts, or EDCCs (called chaincode in Hyperledger jargon), "that can be leveraged to implement business logic and workflows."
On January 16, SWIFT announced that it had signed a Memorandum of Understanding with seven central securities depositories in which the parties agreed to explore a variety of DLT solutions.