SWIFT Taps Ethereum Layer 2 to Rival Ripple’s XRP Payments Network

Core Insights - SWIFT has confirmed the integration of Ethereum layer 2 Linea for its new blockchain-based payment settlement system, marking a significant step in bridging decentralized finance (DeFi) and traditional finance (TradFi) [1][2] SWIFT and Linea Integration - SWIFT has partnered with Consensys and over 30 global financial institutions to develop a 24/7 real-time crypto payments infrastructure, with Linea being the chosen platform [2] - Linea is a zk-EVM rollup designed to reduce transaction fees and enhance scalability, processing approximately 1.5 transactions per second at about one-fifteenth the cost of Ethereum mainnet fees [4] Institutional Adoption and Market Impact - SWIFT processes around $150 trillion in global payments annually, and moving a portion of this to blockchain could represent one of the largest institutional integrations of distributed ledger technology [5] - Major banks such as Bank of America, Citi, JPMorgan Chase, and Toronto-Dominion Bank are participating in the pilot phase, which could position SWIFT as a competitor to Ripple's XRP Ledger [6] Broader Trends in Banking - The initiative reflects a growing momentum in the banking sector towards tokenized settlement infrastructure, as evidenced by trials like JPMorgan's Onyx network and Citi's tokenization pilots [7] - If successful, SWIFT's project could diminish Ripple's appeal to banks and solidify Ethereum's role in cross-border settlements [8] Future Potential of Linea - Linea is viewed as a platform for decentralized communities and governance, with potential applications extending beyond payments [9] - Decentralized autonomous organizations (DAOs) are exploring similar systems using smart contracts, indicating a broader interest in blockchain-based governance solutions [10] Next Steps for SWIFT - While SWIFT has not provided a timeline for commercial launch, the pilot with over 30 banks indicates a move beyond testing [11] - The success of blockchain-based settlement adoption will depend on regulatory clarity and interoperability with existing systems, with Linea's selection linking SWIFT directly to Ethereum's scaling ecosystem [11]