Avalon Ingram: Banks Are Done Experimenting With Tokenization

Avalon Ingram (0:00)

What do you mean you don't have a QR code? What do you mean I can't do that? What do you mean there's a limit? It's so far beyond my realm of reality right now.

Robbie Klages (0:08)

My name's Robby and you're watching The Rollup. And today I'm asking you to please subscribe, comment, like and support our channel. We interview some of the best and brightest minds in digital assets, digital finance and tokenization. We are doing this for you.

So please sit back, relax, enjoy the show, and thank you so much for all your support. And we are live with the Digital Assets Business Lead at Swift, Avalon Ingram. Welcome to the show.

Avalon Ingram (0:34)

Thank you very much.

Robbie Klages (0:35)

Pleasure to have you. Swift's blockchain based shared ledger is live. It went live in July.

And so we'd love a catch up on how things are going, what it was like to go live and generally how you're doing here at Token 2049

Avalon Ingram (0:48)

Well, I mean, for Token, I wore very comfortable shoes. Normally it would be an insensible pair of shoes, but we're in sneakers today. I think it fits into the general flow of Token in any case. But in terms of ledger, nine months, an absolute roller coaster. As you know, we announced that we were going to build a blockchain ledger at SyVas last year.

To think that nine months later, we actually have a live blockchain ledger, 17 banks transacting live transactions, sort of blows the mind a little bit. But I think it is a very strong indication of market maturity. Institutions are backing this. I think I read a statistic that since 2020, banks have spent something like 100 billion on tokenization. I don't think it's anymore a question of, will this space be something that is institutionally adopted?

That question is now definitely out the window. Exactly, exactly right.

Robbie Klages (1:45)

Amazing. And so this has been live since July. You made the announcement at CYBOS last year. I was just at CYBOS last week.

And it was so exciting to see a lot of these, the largest financial institutions in the world, all in the same room and tokenization, digital assets. This was the center of the conversation. And so these banks have actually started to transact on Swift's ledger. This is a blockchain based solution. Give us a sense of what have the primary use cases been so far and maybe just compare and contrast what people are using Swift's blockchain for and what people typically use. For anyone who's unfamiliar, what do people typically use Swift for and what are they using the blockchain for?

Avalon Ingram (2:28)

The way that I would rather position this is if you think of Swift as a technical operator, for lack of a better analogy, the plumbing, right? Today, we have messages that are able to be transacted. I think of that as akin to, you know, a letter being addressed to you with really important documents inside, right? That's kind of the Swift message. What that Swift message doesn't have the capability of doing today is moving a digital asset. We need a blockchain for that. So for us, this is a technology upgrade, a very necessary one, because the market indicators are that digital assets are here to stay.

We've in fact been exploring in the space for the last 10 years, if you can believe it. I think we're all a bit fatigued around sandboxing. So getting something to the market that was going to actually start to see real world transactions was really important, which is your point of use cases.

One of the more interesting dynamics within our working group of banks is talking far less about the technology and really starting to talk about business outcomes. I think for a long time, it was very much stuck in the technology conundrum, like, can we make blockchain work? What does this all mean? What is a smart contract? That's sort of been pushed to the side, but what we're really focused on now is, what is the business outcome? And I think what we're seeing is a lot of excitement around corporates. So your large multinational corporates who have bank accounts all over the world saying, surely I can optimize the way that I manage my treasury, which is a very similar problem statement to a bank, right? Like, how do I optimize my liquidity so that I can put capital into yield bearing instruments to give me a little bit more something for my back, right? As opposed to sort of this trap liquidity. So I would say for banks, primarily, it's going to be like liquidity optimization, which sort of echoes for a corporate treasurer.