Swift Just Opened The Door To Ethereum And Solana

Transcript

Well, Tom, welcome to the roll. It's your first time on. >> First time. I love it. First time for everything. >> Absolutely. >> Good to see you and uh love what you guys do. So, I'm happy to be here. >> Thank you so much. It's an absolute pleasure and you I mean, you're you're you're a legend of the game, someone who's uh you know, was was firmly in the Trafi world and being a spokesperson from the inside. >> Um so, maybe you could just, you know, explain you know, you were at Swift and here we are at Cyos. Uh you were CIO at Swift and you were there for six years. And so, I mean, Maybe you could just tell us what happened over those six years that ultimately got you from where you started to where where you were when you left.

>> Yeah, I mean it's it was it was a great run uh and and a great time. The timing was was was perfect. So um super support from Javier and the executive team uh really to figure out how to change the industry, how to set the strategy and and and how to continue to do more for their members, right? I mean, one of the things that that's fantastic about Cybos is it's really a community um show. It's a it's a it's an event for the industry, right? It's not a swift event. It's a swift it's an event for the industry and you see that by the people who show up here. And so I mean it was previous Cybus we had a lot to do. Our team had a lot to do and a lot of work on production and innovation really became really a prominent part of the

show which was was fantastic. Um but it it really I think it's just kind of a convergence of um a dedicated management team that always wants to do more for their community and for their customers. um a regulatory background um that would that that shifted you know fairly quickly especially in the US but then as a catalyst for other parts of the world I mean the world's a big place um but also just just customer demand um and you know we saw like real evidence where there's progress being made not only in the technology but but in demand for like a digital money so if you think about kind of the time that I was at at swift nobody thought about carrying a token over the swift network three years ago right >> right so that was the job of innovation

was to like help define what could be uh and then work with our members and use the convening power we had at Swift to to to prove it and prove the demand and and get something done. And I have to say the Swift team did an amazing job not only just, you know, it was a year ago in Frankfurt where we where we announced the ledger, right? And that was a that was a a big event and a big announcement, but they also announced the payment scheme, right? So in terms of how it fits in, you know, they're going to continue. So it's going to continue to make payments as we have them today better and they've had great success with the with the the scheme program that that rolled out was announced and kind of rolled out in conjunction. So kind of two big

victories um for Swift and for the community with the launch of with the launch of Ledger. >> Yeah. And I I think the market has validated both your forward thinking and Swift's launches that have to taken place over the last couple of years because I think it is now not if it's when and and the industry is accelerating in this direction. And so maybe you could kind of unpack Swift ledger for anyone who's unfamiliar. >> What does it do? What does it not do? Yeah. um people hear about Swift and you know broadly institutions entering the space but help us understand what is what is real about the Swift ledger.

>> So so um something that's that's always important is to be really clear about what Swift is. Swift is a network where the corresponding banking business model along with other business models runs on the network, right? And so um >> and and for anyone who's unfamiliar with correspondent banking, how does that differ from traditional banking? I mean it's well it's a obviously a form of of banking but it's primarily focused on large value payments on financial institutions and market infrastructures and corporates and of course banks um and it's the way in which uh in which you know payments are made cross border for large value payments right and I I like to say that you know $50 is not 50 million >> right if you went to a corporate treasur and you said hey I got something that's

faster and cheaper and it works most of the time >> that they'll they'll smile like you did right they're like well when you get it to work, come back and talk to me. Right? So when you when you get into course money banking, it's all about certainty. It's all about, you know, compliance. You can't you can't transact with somebody in a far in another country cross border and then hope that it's compliant. It has to be compliant. You have to know what happens when something goes wrong. And that doesn't happen much, but when it does, you need to know, you know, what are the rules? How do we do this? And then you have to do it in a standardized way. you know, Swift connects, you know, 200 countries and I think Javier said yesterday 40,000 plus corridors, right? You need that standardization and that robustness in

the network to be able to run the kind of large value payments that that go across Swift >> and Swift Ledger is bringing this onchain. >> So, I think this the the strategy behind the Swift ledger is exactly the right one, right? And you can everybody who's on Swift can continue to do what they've always done on Swift 50 plus years, right? What this gives them is another option, another way to make crossber payments. So when we when we announced the ledger um what what happened was is um we then offered the banks here's an alternative for you to do a crossber payment and the first workflow that was implemented and went live just recently right um the first workflow were for banks to pay each other and do a crossber payment in their using their own deposit tokens right so it's not

it's not replacing anything there's not ripping up rails it actually makes the network more valuable and more relevant because now there's another way another option for banks who choose to do it and some may, some may and some may not, but they choose to do it. They can now do crossber payments with the deposit tokens that they've created, right? So, it just kind of opens up a whole another world of of kind of possibilities and and makes that capability available to anybody who's a Swift member. >> Yeah. And the head of Swift on stage the other, you know, just yesterday said, um, that this is no longer about trading both sides of the spectrum. And so you're offering these banks an alternative that they can they can use

to transact and this has taken place over the last year from like you said the announcement in Frankfurt uh to making this a reality and seeing some of these case studies go live. >> What has happened in that last year >> since going live and what do you anticipate is going to happen over the next year? >> Yeah, I I I I tweeted out I re reposted uh Swift uh post today because I I that's exactly what's happening, right? the idea of like trade fi and defy it's just fi it's just finance right so you know we don't call things crypto when we start using them mainstream right we don't call stable coins crypto anymore right so I I mean I Javio is spot on on that one and I think that's a really good signal to the market like you know this is this is converging right and it

is happening and it doesn't mean you're going to because you have a stable coin you're going to rip up an instant payment system you know in a in a particular country it all it's all coming together and so I Um I think what's really some important signals are um how quick the kind of demand they saw from the banks and how quickly they turned it around. I mean if you think about a a major financial infrastructure like Swift and announcing something last September and and being able to talk about the results a year later it's an amazing delivery, right? And it's all done in in the way that you'd expected to be done from Swift. No cut corners, you know, no games, no smoking mirrors.

It's it's actually ready, right? which is the team did an amazing job to get that out there >> and and I think there are maybe a lot of misconceptions that some of the you know crypto communities like to put their own spin on these kinds of things that are going out you know I >> I've never seen that that happens >> you're famous for uh uh you know the the armies the Ripple armies they like to >> I just like the truth I just like the truth let's just anchor step on the truth >> yeah and so help help us understand like the fact and the fiction here what are people claiming and why is that not true and what what is the the reality of the Swift ledger? How does it work? What is the the value proposition that it brings these banks? Why are they choosing it as

the alternative? >> Yeah. So, I mean um I mean people claim things all the time, right? And they're there always will and sometimes they'll be accurate and sometimes they'll be a lot less accurate, right? Uh and I think it's important and uh and you I get a really good response when you just go, look, let's just be really clear about what we're talking about. Let's talk about what this really is. Let's talk about what that might be a signal for because the signal to noise ratio, you know, not only in digital assets, but when you you you know, you have programmable money with AI, it's actually really hard to to try to figure out what's what's a true signal of of something that's happening versus noise.

And there's a lot there's a lot of noise all over the play and you can get it out there as fast as possible, right? So again, Swift is special in it's a network. It's offered it's built as new blockchain technology on top of the network. Um but but it doesn't do what um and it gets conflated in terms of what it does with other u blockchains or networks or something. It doesn't do settlement, >> right? >> That's not a custodian. >> You know, Swift is not going to issue tokens. That's not what they do, right? And so um so part of it is just being really clear about what they do and what they don't. And then think about how the advantage does that bring. If you send two different assets, this is completely um completely illustrative, right? One bank sends a stable coin, the other bank

sends a tokenized deposit, >> maybe in the same currency, maybe in different currency, whatever that is, right? Would be in different currencies. um one side of that the workflow that's the settlements done off of swift that could be done at a regular central bank of uh England or or the Federal Reserve something like the other side could be settled on Ethereum or Salana right so you have this capability you have this capability where you can swap tokens in different currencies for example you could call that real-time FX right if that was what the agreement was and you can settlement on instant payment systems or central bank money right at a at a central bank and you could do it on on one of the high volume chains which are getting lots of traction like Ethereum and Salana right for and

there's others of course but again it doesn't swift doesn't make that call it's down to their members that are doing the transactions say what they want the settlement be done so all this settlement conflation I think kind of adds to the confusion a bit and if you just kind of get down to the fact like what swift is and how it helps the community and how it helps the member of the bank it just makes it a lot easier to understand >> I think that's a big misconception is that it's a blockchain but it doesn't do settlement and and and so if it doesn't do settlement and it doesn't do custody and it doesn't do tokens, what does it do?

>> It actually orchestrates transactions between two different members and it implements a settlement workflow with with a a tokenized asset regardless of where you want to settle it. So I I very much expect that you know you have to start with value and payments because that's what that's the the kind of the bread and butter part of the business. But now that you have value, then the question is what else can you do with it? And I'm I'm not responsible for Swift strategy, but it wouldn't surprise me to see them set step into other asset classes, right? You need to have money as the foundation for everything else that's going to be settled.

>> So, I mean, we we'll we'll see what they do. The the team's very capable. They're very switched on. Um, you know, they're very very um eager to kind of work with the community to figure out what to do next. I'm sure it's going to be a pretty pretty busy road map for the next couple years, >> I'd imagine. So, yeah. Yeah, there's some there's these top these are world class people that are that are working on the ledger and the work that's being done at Swift. >> Absolutely. And there's, you know, so many companies that have been instrumental in helping to bring this about. We're here at the chain link booth, but you mentioned Ethereum, Salana. I mean there's several you know just maybe you can just speak to the the partners that come from the industry that have helped to you know kind of

bring swift into a position where it is familiar with the onchain side of the world because it has extensive expertise in sort of the way that payment orchestration has been done up till now and now they've been able to you know kind of combine forces with some of these people that are really focused on the technology. Well, one of the thing things that really comes out at Cyos is I think that the the in institutions, financial institutions, banks, whatever whatever part of the ecosystem at play, the ones that are going to make the the the most progress um and substantial progress that's sustainable is going to do it with partners, >> right? So that whole partner ecosystem uh to to me is is probably the most um effective way, you know, whether it's uh a settlement chain, whether it's a

wallet provider, whether it's, you know, somebody that's helping with other kinds of other parts of the workflow because everybody needs to get to scale >> and and and nobody has enough resources to build that all themselves. They got a business to run. Um they you know, they got to service their customers. They got to invest in the existing payment rails, right? Like we talked about with the with the scheme, all of those things are happening. So I think the only way you're actually going to be able to get ahead and kind of keep at pace with the industry is it is is with partnerships and and there's there's dozens of good opportunities to do that, right? And Swift always is in the middle and they're always neutral to be able to help that, right? So again, it's not about picking winners and losers. It's about how do you actually bring

everybody together in a safe, secure, you know, standardized way. And they've been doing that for a long time and they'll continue to do that in the future. >> Yeah. and they they've been able to harmonize so many of these partners and find themselves in the position where they are able to support the entire industry and you kind of mentioned you know kind of getting getting ahead and you know there are some rumors in the rumor mill >> that things might be coming ahead >> very soon. Is there anything you can share about, you know, you your work now that you're out of Swift? Anything that you can share with us based on these rumors?

>> So, so some of those rumors are true. Um, we are going to be uh making some big announcements about a month from now at money 2020 in terms of what uh what we're doing next and kind of the the momentum that we're getting both u in terms of development partners um investors and kind of the ecosystem forming. So stay tuned for uh for money 2020. It's exciting times. Thanks so much for spending the time. Thanks for having really appreciate it.