SWIFT: Interoperability is the key challenge for deposit tokens

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has identified interoperability between banks as the key challenge for the widespread adoption of deposit tokens. In a company post, Jack Pouderoyen, SWIFT's Head of Digital Asset Strategy, pointed out that the main issue is not the development of deposit tokens themselves, but rather creating a form of money that can be used beyond a single bank's network. He stressed the need for common standards, operating rules, and broad participation among banks. Pouderoyen noted that a current limitation is that even when deposits are tokenized, transfers are restricted by the issuing bank's Know Your Customer (KYC) procedures and existing interbank agreements, making them difficult to use immediately at other banks. He added that SWIFT could help achieve compatibility by setting standards and coordinating interbank transactions, all without creating a new payment network. Under this model, the legal authority for final payment settlement would remain with the existing banks and payment systems.