DBS and Citi Complete First Weekend Cross-Border USD Token Payment
According to Cointelegraph, Singapore's DBS Bank and the U.S. Citi Group completed a cross-border USD payment based on tokenized deposits on September 5 using the blockchain ledger of the Society for Worldwide Interbank Financial Telecommunication (SWIFT). This marks the first cross-border USD tokenized deposit payment completed over a weekend, with the entire settlement process taking only a few minutes, whereas traditional correspondent banking systems would typically require waiting until Monday, taking about two business days to complete.
DBS and Citi converted traditional deposits in their respective bank accounts into tokenized representations on the SWIFT blockchain ledger, enabling real-time value transfer without waiting for the traditional correspondent banking network to resume operations on Monday. Unlike stablecoins or native cryptocurrencies, these tokenized deposits have their corresponding assets remaining on the issuing bank's balance sheet and are subject to existing regulatory frameworks.
This transaction is part of the "17 Banks" tokenized deposit 24/7 payment pilot project launched by SWIFT on July 9 this year, which took only nine months from concept to implementation. The 17 participating banks include ANZ, BNP Paribas, BNY Mellon, Citi, DBS, First Abu Dhabi Bank, FirstRand Bank, HSBC, Itaú Unibanco, Lloyds Bank, Mashreq Bank, MUFG, OCBC, Standard Chartered, UBS, UOB, and Wells Fargo, with DBS being the only Asian bank in SWIFT's core design team.
Reports indicate that the blockchain ledger introduced by SWIFT is positioned as a "secure orchestration layer for bank tokenized deposits," aimed at speeding up the existing correspondent banking clearing system rather than replacing it. Banks can first settle transactions through their respective ledgers and then complete final clearing through existing systems, ensuring compliance and risk control standards are maintained. SWIFT's existing messaging system is connected to over 200 markets and more than 11,500 institutions, with 75% of payments currently arriving within 10 minutes. SWIFT's Chief Commercial Officer Thierry Chilosi stated that the new ledger capability "extends the trust and stability of the mature financial system to the forefront of digital currencies."
The report mentions that Citi's tokenized service, "Citi Token Services," currently processes about $1 billion in funds weekly, with its "24-hour USD clearing" service available to over 300 global bank clients. DBS's tokenized service platform, "DBS Token Services," is set to launch in 2024.
From an industry mechanism perspective, the core breakthrough of this transaction lies in breaking the traditional cross-border USD settlement system's "no clearing on weekends" limitation, allowing corporate treasurers to utilize funds that were previously idle during weekends or overnight batch processing periods in real-time, thereby enhancing global fund utilization efficiency. For SWIFT, this move is also a key initiative to upgrade in collaboration with the traditional banking system amidst the ongoing encroachment of stablecoins and other native cryptocurrency cross-border payment solutions on the traditional correspondent banking clearing market share. The benefits of improved liquidity and settlement efficiency will primarily be gained by the 17 global banks participating in the pilot project.
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As a traditional monopoly in the global interbank messaging and settlement network, SWIFT has historically faced challenges from the crypto and blockchain technology camp attempting to bypass the traditional banking system—from early Bitcoin cross-border remittance attempts to recent stablecoin companies (like Circle and Tether) continuously encroaching on traditional correspondent banking business in cross-border payment scenarios. This time, SWIFT chose not to confront or ignore but instead emulated its previous approach to accelerate cross-border payment messaging with SWIFT gpi, actively integrating blockchain technology into its messaging network, completing the transition from concept to implementation in nine months. This aligns closely with the "accommodative innovation" strategy commonly employed by traditional financial infrastructure institutions when responding to disruptive technological impacts.
From the perspective of fund mobilization logic, Citi's "Citi Token Services" currently processes about $1 billion weekly, combined with DBS's tokenized service platform launching in 2024, indicating that leading banks have already laid the groundwork for tokenized deposit infrastructure. By completing interconnectivity through SWIFT's unified ledger, this effectively breaks down liquidity islands that were previously scattered across various banks' self-built tokenized platforms. The direction of capital mobilization is to allow short-term funds that were previously idle due to interbank and cross-border clearing window limitations to be continuously invested or allocated during weekends and non-working hours, thereby reducing the opportunity cost of funds for corporate finance departments.
This follows the same logic as the SWIFT gpi (Global Payment Innovation) project, which compressed cross-border payment arrival times from days to hours, and forms a competitive relationship with institutions like JPMorgan's Onyx/Kinexys and Morgan Stanley that have built their own tokenized deposit networks. The current global cross-border payment infrastructure is in a transitional phase of "traditional correspondent banking networks competing alongside emerging stablecoin/blockchain solutions." SWIFT's launch of a unified ledger in collaboration with 17 global banks represents a collective defensive upgrade from the traditional banking camp against stablecoin cross-border payment solutions.
Essentially, this is a combination of "technological substitution" and "industrial chain reconstruction"—mechanistically, SWIFT has not allowed blockchain technology to replace its messaging network but has embedded it as an "orchestration layer" within the existing clearing system. The ultimate authority of interbank fund settlement remains within the traditional correspondent banking system, but capabilities such as real-time fund allocation and weekend availability, which were previously only offered by stablecoins, have been reintegrated into the regulated banking system. This structural adjustment means that the cross-border payment niche market that the stablecoin camp originally sought to capture with "24/7 availability" is being reclaimed by the traditional banking system through technological upgrades, regaining pricing power and customer stickiness.