Interbank messaging network SWIFT has collaborated with world’s leading transaction banks to develop the proof of concept (PoC) application to test blockchain technology.

Early this year, SWIFT announced the launch of this blockchain PoC to explore whether the distributed ledger technology (DLT) can be implemented by banks to enhance reconciliation of their nostro databases in real time, optimizing their global liquidity.

The PoC eases cross-border payments and makes it efficient that serves as SWIFT’s mission championed through the launch of the global payments innovation (gpi) service, which offers fast, transparent and traceable cross-border payments to customers.

“The nostro DLT proof of concept is deeply embedded in the SWIFT gpi story of streamlining the cross-border payments system,” Wim Raymaekers, Head of Banking Markets and SWIFT gpi at SWIFT said. “It allows us to explore how this maturing technology can provide a collaborative solution to what our gpi member banks have identified as a significant pain point – nostro accounts reconciliation.”

The banks that have joined in the blockchain PoC include Australia and New Zealand Banking Group (ANZ), BNP Paribas, BNY Mellon, DBS Bank, RBC Royal Bank and Wells Fargo among other participating banks. Working with SWIFT, these banks identify the challenges, define the specifications, build the application and ultimately test the concept.

The announcement stated that additional 20 banks will join the program at a later stage in order to validate as well as test the DLT PoC. The results of the concept will be presented at Sibos in Toronto in the month of October this year.

“We are very excited to start the DLT proof of concept with these participating banks. This is a great step forward and another example of how SWIFT and the industry can work together to solve concrete business challenges with an innovative and collaborative mindset,” Damien Vanderveken, Head of R&D, SWIFTLab and UX at SWIFT, stated.

SWIFT is leveraging recently released Hyperledger Fabric v1 technology, in a move to develop the blockchain PoC. It combines with SWIFT assets in order to make sure that all the information related to nostro/vostro accounts is kept private and seen only by the account owner and its correspondent banking partner.