Blockchain firm SETL partners Swift for common tokenisation framework pilot
Enterprise distributed ledger technology (DLT) and blockchain firm SETL has successfully piloted a common framework for Swift that links tokenisation systems between central securities depositories (CSDs) and global custodians.
Swift, SETL, Deutsche Börse-owned Clearstream, Northern Trust and other parties from the tokenised and traditional asset ecosystem explored the issuance, delivery versus payment (DVP) and redemption processes needed to support a frictionless tokenised asset market.
The experiments, which utilised SETL’s PORTL, a permissioned toolset for financial institutions to build applications that interoperate between existing infrastructures and a range of enterprise ledger technologies, leveraged existing forms of payments and central bank digital currencies (CBDCs).
The results of the pilot are set to be published ahead of Swift’s annual Sibos conference.
Anthony Culligan, chief engineer at SETL, says these experiments have the potential to create broader accessibility and interoperability between emerging securities tokenisation networks.
To avoid a patchwork of technologies and platforms that would eventually require stitching together, Swift is focusing on interoperability, linking up market participants and simplifying operations by taking on activities centrally that would otherwise have to be carried out between institutions bilaterally.
Marjan Delatinne, head of payments at SETL, says this is a “pivotal moment” and the experiment “could lay the foundation for universal interoperability between participants and systems during the transactional lifecycle of tokenised assets”.
Vikesh Patel, head of securities strategy at Swift, says: “The insights from this exercise with leading capital markets participants will help us define and prioritise the concrete steps required to enable seamless processes for tokenised assets.”
SETL says the market for tokenised assets is expected to reach $24 trillion by 2027.