SWIFT is dying: stablecoins are replacing the 1970’s global banking backbone in real time

The global cross-border payments market, which processed 190 trillion dollars in transaction value in 2023, is increasingly constrained by an infrastructure originating in the 1970s. The core of this legacy model is the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. SWIFT was created in 1973 by 239 banks from fifteen countries to replace the inefficient telex system for international payments. Launched in 1977, it provides secure messaging between financial institutions rather than moving money itself. Today, SWIFT connects over 11,500 institutions in more than 200 countries, forming the backbone of global banking. However, a crucial limitation of SWIFT is that it is a messaging system that only transmits instructions rather than moving actual funds. Settlement requires a sequential chain of two to five correspondent banks to manually reconcile nostro and vostro accounts. Each intermediary bank along this pathway extracts its own fee of $10 to $25 to, in …