• Citi and Swift tested a Payment-versus-Payment workflow synchronizing fiat and digital token settlements.

• The trial integrated Swift’s network with blockchain tools like escrow and orchestrators for seamless transaction management.

• This initiative addresses growing stablecoin volumes, projected to reach $1.9 trillion by 2030 according to Citi research.

Citi and Swift PvP trial revolutionizes fiat-stablecoin settlements, enhancing speed and transparency. Discover how this bridges traditional finance and blockchain for future-proof payments—explore the details now.

What is the Citi and Swift PvP Trial?

The Citi and Swift PvP trial demonstrates a coordinated settlement process between traditional fiat currencies and digital tokens like stablecoins, using existing banking infrastructure alongside blockchain technology. This experiment proves that legacy financial systems can integrate with distributed ledger networks without requiring a complete overhaul, enabling simultaneous execution of payment legs to reduce risks in cross-currency exchanges. By testing this on a simulated environment, the trial highlights practical steps toward interoperable digital asset settlements in global finance.

How Does the PvP Workflow Bridge Fiat and Stablecoin Settlements?

The workflow leverages Swift’s established messaging network as a central communication hub, augmented by blockchain-specific components such as smart contracts, escrow mechanisms, and orchestrators to manage the dual aspects of transactions. In the trial, a new messaging format was developed to track trades from initiation to completion, incorporating fields tailored for fiat-digital interactions. This setup ensures that the fiat leg settles via traditional bank accounts while the stablecoin leg processes on a blockchain, with an escrow reducing the irreversibility risks inherent in blockchain transfers. Citi utilized test USDC tokens on the Ethereum Sepolia testnet to mimic real-world conditions, confirming the synchrony without atomic finality across disparate systems. According to Citi research, this approach could streamline conversions as stablecoin transaction volumes approach $1 trillion monthly, minimizing the friction in converting digital assets back to local fiat currencies. Experts note that such integrations are crucial as tokenized deposits proliferate, with projections estimating stablecoin issuance growing to $1.9 trillion by 2030. Ayesa Latif, Citi’s Head of FX Products, emphasized that this represents “a significant leap forward in understanding and developing infrastructure required to support digital currency transactions,” underscoring the trial’s role in enhancing speed and transparency. The process addresses a key operational gap: while FX standards confirm digital asset trades, they previously couldn’t coordinate simultaneous settlements, leading to inefficiencies in global payments.

Frequently Asked Questions

What Challenges Does the Citi and Swift PvP Trial Address in Fiat-Stablecoin Conversions?

The trial tackles the cumbersome nature of converting stablecoins to fiat, where blockchain’s irreversible transfers clash with banking’s reversible settlements. By introducing escrow and orchestration, it ensures both legs of the transaction align, reducing settlement risks and operational delays in cross-border payments involving digital assets.

Why Is Synchronizing Banking Systems and Blockchain Important for Stablecoin Adoption?

Synchronizing these systems makes stablecoins viable as end-settlement assets rather than mere intermediaries, boosting efficiency in international transfers. This integration, as shown in the trial, leverages Swift’s global reach to connect tokenized ecosystems with traditional finance, fostering trust and scalability for widespread stablecoin use in everyday transactions.

Key Takeaways

• Interoperability Achieved: The trial proves traditional banking rails can sync with blockchain for PvP settlements, paving the way for hybrid financial workflows.
• Risk Mitigation: Escrow mechanisms and new messaging formats minimize exposure from irreversible blockchain actions, enhancing security in fiat-digital exchanges.
• Future Standardization: As stablecoin volumes surge, this model supports industry-wide standards for tokenized asset settlements, urging financial institutions to adapt infrastructure.

Conclusion

The Citi and Swift PvP trial marks a pivotal advancement in bridging fiat-stablecoin settlements, integrating Swift’s infrastructure with blockchain tools to create synchronized, efficient workflows for global payments. With stablecoin growth accelerating toward $1.9 trillion by 2030 per Citi estimates, this experiment lays foundational standards for tokenized finance, reducing conversion frictions and promoting interoperability. Financial professionals should monitor ongoing refinements, as they promise to reshape cross-border transactions and drive broader adoption of digital assets in mainstream banking.

The trial aims to simplify the difficult fiat-stablecoin conversion process by synchronizing settlement across banking systems and blockchain networks.

Key Highlights

• Citi and Swift tested a Payment-versus-Payment workflow that synchronizes settlement between fiat currencies and digital tokens.
• Trial used Swift’s network with added blockchain tools, including escrow and orchestrators, to manage both transaction legs.
• The test marks a step toward standardizing processes for digital-asset settlement as stablecoin and tokenization activity grow.

Citi and Swift have completed a trial that tested whether traditional currencies and digital tokens can be settled against each other in a coordinated Payment-versus-Payment (PvP) workflow. 

The companies said the experiment shows that existing banking rails can be linked with blockchain networks without replacing either system.

Trial links Swift infrastructure with blockchain tools

The test used Swift’s network as the communication layer, while adding blockchain connectors, orchestrators, and smart contracts to handle the digital-asset side. The goal was to see whether the two environments could move in sync during a cross-currency transaction.

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Ayesa Latif, Citi’s Head of FX Products, said the work represents “a significant leap forward in understanding and developing infrastructure required to support digital currency transactions.” According to her, the test showed that traditional financial plumbing can be adapted to improve speed and transparency when digital assets are involved.

Jonathan Ehrenfeld, Head of Strategy at Swift, said the organization is positioned to act as a “secure and trusted single point of access for seamless connection between the tokenized ecosystems and the established global financial community.” He added that the trial demonstrated how Swift’s broad reach could support newer forms of settlement.

Addressing a gap in fiat-stablecoin conversions 

The experiment comes as tokenized deposits and stablecoins continue to grow within global payments. Citi research has estimated that stablecoin issuance could rise to $1.9 trillion by 2030. Even as the monthly transaction volumes near $1 trillion, stablecoins remain mostly intermediaries rather than end-settlement assets, as recipients often convert them back into local currencies.

This process is still cumbersome. Fiat currencies settle within bank accounts, while stablecoins move on public blockchains and rely on irreversible transfers. Existing FX messaging standards can confirm trades involving digital assets, but they cannot coordinate the simultaneous settlement of fiat and digital legs. The trial was designed to close that operational gap.

How the workflow functioned

Citi and Swift built a new messaging format that followed a trade from initiation to final settlement. The design included fields specific to fiat-digital exchanges and introduced an escrow method to reduce the risk created by irreversible blockchain transactions. A central orchestrator sequenced the steps so that both legs were aligned before completion.

For the digital-asset leg, Citi used test USDC tokens issued by Circle on the Ethereum Sepolia testnet to simulate a near-production setup.

What comes next

The companies plan to continue refining the process with input from the wider financial sector. The current model is synchronized but not fully atomic because it spans two different technologies. Still, the trial is viewed as an early step toward developing standards and operating models that could support institutional-grade digital-asset settlement in the future.

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This trial not only validates the technical feasibility of PvP in a hybrid environment but also sets a precedent for regulatory and operational alignment in the evolving landscape of digital finance. As institutions like Citi and Swift collaborate, the path to mainstream stablecoin integration becomes clearer, potentially transforming how value moves across borders. The emphasis on non-replacement of existing systems reassures stakeholders that evolution can occur incrementally, preserving the stability of global financial networks while embracing innovation. Further developments may involve broader participation from central banks and fintech firms, accelerating the standardization process. In essence, this initiative underscores the maturing synergy between legacy finance and blockchain, positioning stablecoins as credible tools for efficient, low-risk international settlements.