Although rooted in its legacy as a messaging network, SWIFT has begun testing Ethereum-based stablecoin payments on the Linea Layer 2 network, a pilot that joins traditional finance messaging with blockchain settlement to accelerate and streamline cross-border transfers. The trial, initiated in 2025, involves more than a dozen major global banks, including BNP Paribas and BNY Mellon, and represents a strategic effort to move beyond pure messaging into actual value transfer. Observers note that the initiative is intended to combine SWIFT’s established communication protocols with blockchain settlement rails, aiming to reduce delays and reconcile operational differences between TradFi and decentralized systems. The pilot’s design foregrounds interoperability, seeking to demonstrate practical integration rather than theoretical capability.
SWIFT pilots Ethereum stablecoin settlements on Linea L2, marrying messaging expertise with blockchain rails to speed and simplify cross-border payments
Linea, an Ethereum Layer 2 solution built by Consensys, was chosen for its zero-knowledge rollup architecture, which provides high throughput and low-cost transactions while inheriting Ethereum’s security properties. The zk-rollup approach enables cryptographic proofs that can validate transactions without revealing sensitive data, a feature emphasized as necessary for compliance with banking privacy requirements. Technical capabilities include on-chain payment instructions and combined settlement transactions, which streamline workflows by reducing back-and-forth messaging and lowering settlement risk. These features are presented as addressing key pain points in correspondent banking, particularly speed, cost, and reconciliation.
Potential impacts on cross-border payments include significant cost reductions and faster settlement times, with projections suggesting transaction costs could fall by up to 70% and settlement become near real-time, as opposed to current multi-day processes. The trial also aims to reduce the number of intermediaries required in international transfers, thereby simplifying liquidity management and lowering counterparty exposure for participating banks. If stablecoins on Layer 2 networks scale reliably, they could become foundational instruments for certain types of trade settlement, although wider adoption depends on coordination across institutions and jurisdictions. SWIFT tests also explore on-chain messaging to enable direct blockchain settlements, bypassing intermediaries.
Regulatory and compliance considerations remain salient, as cross-border stablecoin use implicates diverse legal frameworks; Linea’s zero-knowledge features are positioned to help meet privacy and oversight demands, yet regulatory hurdles and policy alignment across jurisdictions will determine the trial’s ultimate viability. The pilot further signals SWIFT’s broader strategic goal to integrate DLT services with its network as part of planned live trials expanding into stablecoins and CBDCs.
