HSBC, Standard Chartered Test Tokenized Deposits on Swift's New Ledger

Validation for Swift ledger

Jointly announced by the banks on 19 Aug, the interoperability milestone was also an early validation of digital money for the Society for Worldwide Interbank Financial Telecommunication (Swift). The global messaging network that was founded in 1973 and has underpinned cross-border payments for nearly five decades has been expanding its role to also become the interoperability layer for tokenized bank money by rolling out a blockchain-based shared ledger.

HSBC and Standard Chartered exchanged payment messages via Swift's ledger, with the resulting obligations recorded on HSBC's Tokenised Deposit Service (TDS) and Standard Chartered's own tokenized-deposit infrastructure. Swift’s ledger served as a secure orchestration layer, enabling obligations to be matched and netted between the two banks prior to final settlement via existing systems. The underlying architecture is open-source and Ethereum Virtual Machine (EVM)-compatible, built on Hyperledger Besu.

Faster liquidity

The transaction "demonstrates how digital money issued by banks can be interoperable across institutions while maintaining the integrity and regulatory oversight of the existing financial ecosystem," said Lewis Sun, head of digital currencies at HSBC.

The use of tokenized deposits across banks meets increasing institutional demand for "faster, more efficient ways to move liquidity and optimize working capital," said Mark Willis, head of emerging payments, transaction services and digital assets at Standard Chartered.

Evolution not revolution

However, the experiment did not signal a full-scale replacement of existing cross-border settlement infrastructure, underscoring that the market remains in a transitional phase. While the live transaction marked a step forward for institutional adoption, the model will need to expand across transaction volumes, banks, currencies and jurisdictions before its broader impact can be assessed. 

A further test will be whether future pilots move beyond matching and netting payment obligations to support routine, commercially significant settlement flows.

Pilots by 17 banks

Swift, a Belgium-based member-owned cooperative, first unveiled the blockchain-based ledger concept at Sibos 2025, its flagship annual banking conference in Frankfurt, and rolled out the minimum viable product in July 2026, drawing interest from 17 banks across six continents preparing to pilot live transactions using tokenized deposits.

Other banks conducting trials included Citi, Wells Fargo, France’s BNP Paribas, Singapore’s DBS and Japan's MUFG.

For decades, Swift's core proposition has been that banks can send trusted payment instructions to one another using common standards.

Sanctions leverage

Swift facilitates more than $150tn in cross-border payments each year. The network connects more than 11,500 institutions across over 200 countries. Losing access to Swift through sanctions, as several Russian banks did in 2022, can isolate a country from global financial flows.

For some institutions, using a Swift-coordinated layer may be less disruptive and operationally safer than joining an entirely new network operated by a technology company or a crypto-native platform. The Swift ledger is now being tested for relevance at a time when banks already have access to alternative instant-payment rails or private blockchain networks.

For Swift, the commercial prize is not necessarily the ledger but the ability to remain the trusted coordinator as money, securities and payment instructions become digital, programmable and available around the clock.