Beyond SWIFT

How the U.S. is Re-Building the Operating System for Global Finance

The Big Picture: Money is Going Digital

Imagine sending money to someone halfway around the world as easily as sending a text message, 24/7, instantly settled, with no bank holidays or weekend delays. That's the promise of what could be "SWIFT 2.0," and it's closer to reality than one might think.

Currently, international money transfers travel through a complex web of banks using SWIFT, a 50-year-old messaging system connecting over 11,500 banks across 200 countries. Despite its reach, transactions still take days to complete and incur substantial fees. But what if we could upgrade this system using the same technology that powers cryptocurrencies?

Three Key Developments in 2025

1. Federal Regulatory Approval

In July 2025, the U.S. enacted the Genius Act, the first major federal law regulating payment stablecoins. This legislation defines stablecoins as private digital tokens pegged 1:1 to the dollar, backed by fully reserved assets including U.S. currency and Treasury bills. While not considered legal tender or federally insured, these regulated digital payment instruments can now be used for payroll, international trade, and other business transactions under a comprehensive licensing framework.

2. Institutional Adoption

Major financial institutions have moved beyond experimentation to active implementation:

• Fidelity launched a digital Treasury money market fund on Ethereum, attracting over $200 million almost immediately

• BlackRock's digital fund has grown to $2.2 billion

• Citi processes billions in transactions using its proprietary digital token system

3. Market Scale

The numbers demonstrate serious momentum:

• Tokenized U.S. Treasuries and similar investments: $7.4 billion

• Digital dollar (stablecoin) market: $278 billion, larger than many countries' GDP

The Blockchain Landscape: Multiple Platforms, One Vision

Ethereum: The Market Leader

Ethereum has emerged as the primary blockchain for digital finance, functioning like the Interstate highway system of this new infrastructure. Its dominance stems from three key advantages:

Network Effects: Major financial players chose Ethereum first, creating a self-reinforcing cycle. J.P. Morgan's wholesale payments, Fidelity's digital funds, and much of BlackRock's BUIDL fund operate on this platform.

Built-in Compliance: The platform provides sophisticated features for authorized trading, automatic tax withholding, and instant freezing of illicit funds, essential requirements for institutional adoption.

Proven Reliability: Years of processing millions of daily transactions have established Ethereum's stability and trustworthiness for handling billions in value.

The Competitive Ecosystem

Financial institutions are diversifying across multiple blockchains, each offering unique advantages:

Stellar has quietly become the second-largest platform for tokenized Treasuries, hosting Franklin Templeton's BENJI fund and WisdomTree products. Its specialization in simple, fast payments makes it ideal for mutual fund transactions.

Solana attracts users needing maximum speed, including portions of BlackRock's BUIDL fund. While occasionally requiring maintenance, its lightning-fast processing appeals to specific use cases.

Layer 2 Networks (Arbitrum, Base, Optimism) function as Ethereum's suburbs—offering the parent chain's security at lower costs. WisdomTree, Franklin, and Ondo utilize these networks to reduce fees while remaining in the Ethereum ecosystem.

The Multi-Chain Strategy

Leading institutions aren't choosing single platforms but deploying across multiple networks:

• BlackRock's BUIDL Fund operates on Ethereum, Arbitrum, Optimism, Polygon, Avalanche, Solana, and Aptos

• Franklin Templeton's BENJI spans eight different blockchains

• WisdomTree distributes across six networks

This approach ensures maximum accessibility and reach, similar to streaming services offering content across multiple platforms.

Tomorrow's Payment Infrastructure

Current International Payment Process (1-2 business days):

1. Initiate transfer through your bank

2. Bank sends SWIFT message

3. Multiple banks process during business hours

4. Money eventually arrives

Future Blockchain-Based Process (minutes or seconds):

1. Your bank sends a message

2. Smart contracts (automatic programs) instantly exchange digital dollars

3. The recipient gets paid immediately, even at 3 AM on Sunday

4. Everything is recorded, traceable, and compliant with regulations

This can include programmable and tailorable features. Imagine escrow that automatically releases funds when conditions are met, or international trade payments that settle the instant goods are delivered.

Challenges and Solutions

Digital Bank Runs

Instant withdrawal capabilities could accelerate panic scenarios. Regulators are developing "speed bumps" and insurance mechanisms to prevent rapid contagion.

Banking Evolution

Direct digital dollar holdings may reduce traditional deposit needs. Banks must pivot toward lending and investment services rather than simple deposit-taking.

Interoperability

Seamless bridges between Ethereum, Stellar, Solana, and traditional systems are essential, technically complex, but critical for adoption.

Market Projections: The Scale of Transformation

Near-Term (By 2030)

• Boston Consulting Group: $600 billion in tokenized funds

• Various analysts: $300 billion to $1 trillion in tokenized bonds

• McKinsey: $2-4 trillion in total tokenized assets

Medium-Term (By 2034)

• Standard Chartered: $30 trillion potential market, equivalent to today's entire U.S. economy

Practical Implications

• Investors: Retirement funds with second-by-second interest reinvestment

• Businesses: Instant conversion between cash reserves and payment tokens

• Government: Diversified, expanded funding sources

Strategic Benefits for the United States

Treasury Demand Multiplier

As stablecoin usage expands globally, it creates a direct multiplier effect for U.S. Treasury demand. Each new stablecoin in circulation requires backing by U.S. government securities, meaning that widespread adoption automatically generates more buyers for American debt. This provides the government with a larger, more diverse funding base for its operations.

Digital Infrastructure Leadership

The U.S. government has recognized a unique opportunity to shape the future of global finance. By encouraging blockchain adoption while maintaining regulatory oversight of dollar-backed stablecoins, America is essentially constructing a new digital financial infrastructure, think of it as building the "roads and bridges" of tomorrow's economy.

The Network Effect Advantage

Once this system reaches critical mass, it becomes self-reinforcing. More users attract more services, which attract more users, all while strengthening demand for the underlying U.S. assets that make the system possible.

Preserving Dollar Dominance

Rather than fighting against technological change, this strategy embraces it while ensuring American influence remains central. As more countries and businesses adopt blockchain-based financial services, they become dependent on this dollar-centric digital ecosystem. This dependency helps secure the dollar's role as the world's primary reserve currency for decades to come.

The Path Forward

The United States is positioning itself to lead the global financial system's digital transformation while preserving the dollar's dominance through a carefully orchestrated strategy.

The Federal Reserve is researching a digital dollar at a deliberate pace, prioritizing stability over the rushed approaches of competitors like China's digital yuan. Meanwhile, major American banks, including JPMorgan and Bank of America, are building blockchain-based settlement systems that accelerate cross-border transactions while keeping them dollar-denominated.

This transformation rests on three pillars:

Regulatory Foundation: New frameworks for dollar-backed stablecoins extend the dollar's reach into digital ecosystems while maintaining oversight and stability.

Infrastructure Evolution: Blockchain technology is poised to replace the current SWIFT system as the backbone of global payments, with the U.S. ensuring the dollar remains central to this new financial architecture.

Strategic Alliances: Partnerships with allied nations ensure that new global payment systems reinforce rather than challenge dollar centrality.

For the U.S. government, the goal is both ambitious and clear: harness emerging technologies to make international money transfers as simple as domestic digital payments.

This transformation represents the most significant upgrade to financial infrastructure since credit cards replaced checks. However, unlike previous transitions that happened organically, this one is strategically designed. As blockchain technology reshapes global finance, the U.S. is ensuring the dollar remains at its center, securing American financial leadership for the digital age.