Taurus co-founder says banks need three internal layers to use Swift's ledger

Banks that want to move tokenized deposits across Swift's new ledger will need three pieces of their own technology standing behind the connection, according to Lamine Brahimi, co-founder and managing partner of the custody and tokenization firm Taurus.

"You need your own permissioned ledger that interacts with that of Swift, you need wallet capabilities, and you also need tokenization and smart-contract capabilities to be able to integrate the Swift smart contracts," Brahimi told CoinDesk.

That list is also a fair description of what the ledger is: an orchestration layer that lets institutions move tokenized deposits across borders around the clock while final settlement continues through existing arrangements. Because the bank at either end still has to hold and manage the tokenized deposits, operate the wallets, and run the smart contracts the flow depends on, Swift's ledger sits above a stack each participant builds for itself; connecting to the network is not the same as being able to use it.

The scale of the traffic explains why banks are bothering: Swift said in July that 17 banks were preparing live tokenized-deposit transactions, which CoinDesk describes as its first move to modernize a bank messaging system that has dominated traditional finance since the 1970s. The network still carries money movements of up to $1.5 quadrillion a year, and even a fraction of that volume moving onto a permissioned ledger would put a long list of institutions in the market for the three layers Brahimi names.

Live testing so far has come from the largest institutions. HSBC and Standard Chartered completed the first live interbank transaction on the ledger in August, when the ledger matched and netted the two banks' obligations, as this publication reported, while final settlement still ran through existing systems; DBS and Citi followed with a weekend cross-border dollar payment that cleared in minutes rather than up to two business days.

Brahimi does not read the infrastructure requirement as a flaw in the design; he told CoinDesk the extra technology is not necessarily a major hurdle for banks already issuing or managing digital assets, and he does not expect it to hold Swift back from continuing to dominate its sector. The ledger, he said, is an early-stage product that gives banks a choice between existing payment rails and tokenized deposits that can move around the clock. "I think it's a good move," he said. "That provides the choice."

Taurus has a stake in how that choice gets exercised: the firm announced its Swift integration in August and, according to Brahimi, supplies all three layers through one platform — a permissioned ledger, wallet-management tools, and tokenization and smart-contract software — while competitors may require banks to work with multiple vendors to assemble the same capability. The commercial contest forming around Swift's ledger appears to be less about the ledger than about which firm sells banks the stack underneath it, a contest that favors whoever can hand over a complete package and may not require much selling to banks already running digital-asset operations.

The three-layer requirement is also why tokenized deposits remain largely an institutional product: banks have used internal tokenized-deposit systems for years, but a transfer between two institutions needs shared standards and compatible systems at both ends, a different project from a single bank tuning its own ledger. Brahimi told CoinDesk that tokenized deposits were barely used before Swift's announcement and were mostly confined to very large banks such as JPMorgan — a claim from one vendor chief about a market he sells into.

Settlement is the other half of that story: Settlement finality has been the weak joint on permissioned rails, as this publication has argued, and Swift's design keeps final settlement on existing arrangements rather than moving it onto the ledger. That choice leaves the hardest legal question where it already sits, which likely is a large part of why an interbank tokenized-deposit network is shippable now rather than after a standards fight.

The next test runs through the buy side of those 17 banks: whether each one clears the three requirements with its own engineers or buys them bundled from a vendor, and whether the answers diverge across the group, is the part of the build-out that Swift's own announcement leaves open.