Sibos 2024: Tokenization and Interoperability in Focus As SWIFT Conference Debuted In Beijing

Sibos 2024, the world's biggest financial conference, started Monday at the China National Convention Centre in Beijing, marking the first time the event has been hosted on the Chinese mainland.

The event's theme was "Connecting the Future of Finance," focussing on the divergence of traditional and innovative finance segments and the question of how to bring them closer together. Over 500 experts and 130 exhibitors discussed, along with conventional topics, how blockchain and tokenization were being integrated into mainstream finance and how other novel technologies, such as artificial intelligence (AI), were reshaping global financial systems.

Since its inception in 1978, Sibos, the Swift International Banker's Operation Seminar, has grown from a small banking meetup into the largest and most influential financial services conference in the world. Organized by SWIFT (the Society for Worldwide Interbank Financial Telecommunication), Sibos brings together major players in finance, technology, and policy to address the most pressing issues in global finance.

The Future of Finance: Standards and Interoperability

Interoperability dominated the conference panels and presentations, mirroring the increasing fragmentation that the industry participants face not only from technology but also from policy challenges.

Some topics explored how AI could be combined with advanced data standards like ISO 20022 to enhance security, reduce fraud, and improve operational efficiency in the financial sector, as well as address issues such as economic theft and financial fraud, which pose significant threats to economic integrity.

Panelists discussed how AI systems could monitor and analyze vast datasets in real time to mitigate risks in faster payment systems. This approach aims to ensure that increasing transaction speeds do not compromise security.

Progress is also being made on standardization in the digital asset domain. The presentation by the Digital Token Identifier Foundation (DTIF) highlighted the growing number of agencies that use the unique code.

The problem of the lack of clear taxonomy in the distributed ledger industry, was also explored. The Global Blockchain Business Council spoke about the great advances the professional association is making in mapping the frequently overlapping concepts in DLT.

Tokenization Is The Part of Bankers' Core Business Now

Tokenization, which allows real-world assets like gold or bonds to be digitized and traded on blockchain networks, was also one of the major talking points throughout the event. The technology is expected to revolutionize asset trading by improving liquidity, reducing transaction costs, and enhancing transparency in financial markets.

Many financial institutions are experimenting with new technology to stay updated or for viral press releases. However, HSBC's Head of Digital Assets Strategy, John O'Neil, was more forthright, saying it is not just a "nice to have, but a part of the bank’s core business."

Interestingly, DLT talks at Sibos were dominated by traditional financial institutions with very few representatives from the Web3 community.

Chainlink Partners With Swift

Chainlink was the only Web3 company with a foot in the Sibos exhibition hall, presenting solutions for tokenization, stablecoins, and green digital assets. The company's co-founder, Sergey Nazarov, announced the launch of a new blockchain payment solution for financial institutions in partnership with Swift, allowing them to interact with blockchain technology using Swift messages.

Connecting TradFi and DeFi was a major focus at Sibos 2024, particularly regarding cross-border payments. Swift's ongoing experiments with blockchain technologies aim to improve the efficiency and security of international transactions, with a key emphasis on ensuring that digital assets and CBDCs can interact seamlessly across different blockchain networks. The potential of blockchain to reduce friction in cross-border payments and support real-time settlement was a crucial point of discussion as institutions explored ways to implement these technologies at scale​.

China On The Global Finance Map

The Chinese government hailed Beijing's selection as the host city for Sibos 2024 as a milestone in opening up China's financial sector. In a statement, the government emphasized the importance of the event for the development of Beijing's "four centers" and its role as the national financial regulation center. China's leadership in the development of its digital Yuan, along with its blockchain initiatives, will be key points of discussion as international participants assess the implications for future cross-border systems.

The session on mBridge, a project of BIS Innovation Hub working on a common platform for multiple CBDCs, attracted an unexpectedly large number of visitors. The former governor of China's central bank (PBOC), Zhou Xiaochuan, opened the session, announcing in his speech that the new platform is not being designed against the U.S. dollar but is open to onboarding the digital dollar as well. The following keynote address by the deputy governor of PBOC also highlighted the collaborative approach of the project and the fact that it is fully open source.

China has recently led the research on the mBridge project, helping technically upgrade it at the ledger level. This and the advanced stance of China's CBDC made some observers think that mBridge could be China's bet to challenge the US Dollar's position as the world's settlement currency.

In addition to mBridge, BIS Innovation Hub showcased its other projects, such as Project Aperta, Project Nexus, and Project Rialto.

Overall, Sibos 2024 enabled significant communication and exchange between Chinese and international financial institutions amid the industry's sweeping digital transformation. It also showed that China can contribute to the development of the global financial industry, bridging TradFi and DeFi.