Citi and SWIFT announced the successful completion of a groundbreaking proof-of-concept trial that demonstrates it is possible to settle payments simultaneously between traditional fiat currencies and digital currencies (including stablecoins) using a Payment-versus-Payment (PvP) workflow.

The trial marks a major step toward bridging conventional banking infrastructure with blockchain-based distributed ledger technology (DLT), effectively reducing settlement risk in hybrid fiat-digital asset transactions.

Key outcomes of the trial:

• Leveraged existing SWIFT messaging infrastructure enhanced with institutional-grade blockchain connectors, orchestrators, and smart contracts.
• Introduced a new holistic messaging standard that handles the unique data requirements of fiat-to-digital currency trades from initiation to final settlement.
• Implemented an escrow mechanism to address the irreversibility of blockchain transactions while preserving true PvP principles.
• Used test USDC (issued by Circle) on Ethereum’s Sepolia testnet to simulate real-world conditions.

Ayesa Latif, Head of FX Products at Citi, commented: “These trials with SWIFT represent a significant leap forward in understanding and developing infrastructure required to support digital currency transactions. Our collaboration has demonstrated how existing financial systems can be enhanced with blockchain technology to unlock new levels of speed, transparency, and risk reduction in cross-currency settlements.”

Jonathan Ehrenfeld, Head of Strategy at SWIFT, added: “SWIFT is uniquely positioned to be the secure and trusted single point of access for seamless connection between the tokenized ecosystems and the established global financial community. This collaboration with Citi proves that we can leverage the reach of our existing network while introducing advanced capabilities required to orchestrate fiat-digital currency PvP.”

The initiative addresses a growing market need. According to Citi GPS research, stablecoin issuance could reach $1.9 trillion by 2030, with monthly transaction volume already nearing $1 trillion. However, most stablecoins are ultimately converted back into local fiat currency, highlighting the urgent requirement for safe, synchronized settlement between the two asset classes.

While the demonstrated PvP workflow is synchronized across traditional and blockchain rails (and therefore not fully atomic), it eliminates traditional settlement (Herstatt) risk for both parties through coordinated messaging and escrow.

Citi and SWIFT plan to continue refining the solution in collaboration with the wider financial community to establish scalable, standardized messaging and operational frameworks for institutional-grade digital asset transactions.

The trial reinforces Citi’s ongoing commitment to delivering innovative, client-focused solutions in the rapidly evolving digital asset ecosystem.

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https://www.prnewswire.com/apac/news-releases/citi-completes-landmark-fiat-to-digital-currency-payment-settlement-workflow-trial-with-swift-302615195.html