SWIFT — the Society for Worldwide Interbank Financial Telecommunication — is set to develop its recently announced blockchain payment settlement platform utilizing Ethereum layer 2 Linea, as confirmed by Consensys CEO Joe Lubin.
On Monday, SWIFT disclosed that it had engaged Consensys and over 30 traditional finance institutions to construct infrastructure for a 24/7 real-time cryptocurrency payments system, although it did not specify the blockchain it would use amid widespread speculation about Linea.
Lubin verified Linea’s selection during a fireside chat with Cointelegraph’s Gareth Jenkinson at the Token2049 conference in Singapore on Thursday.
Lubin noted that when SWIFT announced the initiative to the banking community, SWIFT CEO Javier Pérez-Tasso did not reference Linea by name. He mentioned that SWIFT needed to “soft roll out” the “substantial news,” which received a positive reception.
“I believe the sentiment was, ‘thank you for doing this.’ It’s time to unite the two streams, DeFi and TradFi,” Lubin stated.
Consensys has developed Linea as a scaling-focused layer 2 that utilizes zk-EVM rollup technology, capable of processing around 1.5 transactions per second at one-fifteenth the cost of Ethereum’s fees.
With a total value locked of $2.27 billion, Linea ranks as the fourth largest among Ethereum layer 2s, following Arbitrum One, Base Chain, and OP Mainnet, according to L2BEAT data.
SWIFT’s foray into the blockchain payments arena could be significant, managing around $150 trillion in global payments via traditional banking systems annually.
Major banks are getting involved
TradFi firms such as Bank of America, Citi, JPMorgan Chase, and Toronto-Dominion Bank are among those set to participate in trials of SWIFT’s new blockchain payments infrastructure on Linea.
This could represent a formidable challenge to Ripple’s XRP Ledger, which is one of the few prominent blockchain-based payment systems designed for banks.
SWIFT’s initiative to establish a blockchain payments system has been anticipated for some time and leverages the blockchain’s capability for near-instant, 24/7 settlement without intermediaries, thereby minimizing costs, errors, and delays.
Linea may foster a “user-generated civilization,” according to Lubin
Lubin emphasized the broader prospects of Linea beyond mere payments, envisioning it as a platform where “content can be created collaboratively by users.”
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“We will see a user-generated civilization and content on Linea and elsewhere,” Lubin explained. By utilizing Ethereum’s trustless settlement layer, Linea empowers communities to develop their own infrastructure, rules, and applications from the ground up, contrasting with the top-down approach common in traditional governance and banking systems.
Decentralized autonomous organizations are already attempting to operate without centralized leadership, frequently employing smart contracts and decentralized voting systems for treasury management and decision-making. However, few DAOs have successfully scaled to a notable extent thus far.
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