(Yicai) July 30 -- The Society for Worldwide Interbank Financial Telecommunication, a vast messaging network that allows banks to securely transmit information and instructions such as money transfers, maintains a long-term close cooperation with China’s Cross-Border Interbank Payment System, according to the chief executive officer of its Asia-Pacific division.

SWIFT and CIPS operate in a complementary capacity, with close collaboration essential to advancing the internationalization of the Chinese yuan, Kevin Wong told Yicai in an exclusive interview. The former provides secure financial messaging transmission, while the latter is a clearing and settlement system for cross-border yuan payments.

“SWIFT’s core mandate as a financial infrastructure provider is to enable coexistence and interoperability across distinct systems, currencies, and asset classes, facilitating rather than fragmenting the global financial system,” Wong noted. “We do not seek to compete with regional payment infrastructures.”

The People’s Bank of China described SWIFT as a “global public good for financial markets,” a position that the company thinks aligns with its core principles of openness, connectivity, and neutrality, Wong said.

Adhering to Currency Neutrality

After the outbreak of the Russia-Ukraine conflict in 2022, SWIFT disconnected several Russian financial institutions from its network, drawing widespread global attention. The incident sparked widespread discussions, with SWIFT criticized by some as a geopolitical tool wielded by certain nations.

About that, Wong clarified that SWIFT does not have the authority to impose or lift sanctions on any country or entity. Sanction decisions are made by governments and regulatory bodies with legal authority. In fact, many Russian financial institutions can still use SWIFT services.

Contrary to common market misconceptions, SWIFT is neither a funds settlement nor a clearing system. Since its establishment in 1973, SWIFT’s core mission has been to deliver a standardized, efficient messaging infrastructure to facilitate cross-border interbank activity, Wong noted.

SWIFT is collectively owned and governed by over 11,500 member financial institutions worldwide, supports more than 150 currencies, and adheres to the principle of currency neutrality.

SWIFT Ledger Isn’t a Global Digital Asset Settlement Layer

Driven by blockchain and digital innovation, new forms of value assets have emerged across the market, including central bank digital currencies, stablecoins, cryptoassets, and tokenized instruments. SWIFT accelerated its technical evolution in response, launching SWIFT Ledger, a shared blockchain-based framework designed to deliver secure, synchronized transactions across fragmented ledgers and disparate networks.

Digital value instruments operate on siloed ledgers and proprietary networks, and multi-network coexistence is poised to become a permanent feature of the global financial system, Wong said.

He refuted market speculation that SWIFT Ledger aims to build a global settlement layer for digital assets, clarifying that the platform functions as a neutral transaction orchestration layer. It enables seamless integration of new digital asset classes into the existing global financial ecosystem without requiring full replacement of legacy infrastructure or siloed testing environments, while embedding robust cross-network compliance, security, and interoperability safeguards.

As of early July, SWIFT Ledger was ready for initial deployment. Seventeen banks from six continents are ready to use SWIFT Ledger for 24/7 cross-border payments of tokenized deposits.

Regional System Strengthening Plus Global Interoperability

Against the backdrop of increased global attention on financial security, Wong believes that future cross-border payment infrastructure will see two parallel trends: the expansion of regional payment rails and the evolution of global networks centered on interoperability.

At the regional level, many countries and regions are strengthening their domestic and regional payment capabilities to enhance system resilience and support local currency settlement.

For example, China’s CIPS streamlines yuan cross-border clearing, while the Association of Southeast Asian Nations’ cross-border payment connectivity initiative links national real-time payment systems across the bloc to accelerate local currency transaction efficiency.

Meanwhile, blockchain, CBDCs, and other emerging technologies are enabling new cross-border settlement and multilateral coordination models, exemplified by the multi-CBDC bridge initiative in Asia and comparable projects worldwide.

While regional and tech-enabled payment systems multiply, global trade demands cross-infrastructure connectivity. This creates demand for a neutral interoperability layer to link diverse payment rails without replacing legacy systems, which defines SWIFT’s new role, as it does not compete with regional platforms.

“Within this diverse and increasingly fragmented global financial market, SWIFT’s core role remains that of a neutral infrastructure layer, enabling coexistence and seamless interoperability across all systems and currencies to preserve, rather than fragment, the integrity of the global financial system,” Wong stressed.

Editor: Futura Costaglione