Citi and Swift Complete Landmark Fiat-to-Digital Currency Payment Trial

Citi and Swift recently completed a successful trial proving that it is now possible to settle payments between fiat and digital currencies using a Payment-versus-Payment setup. This is a major step forward and highlights how a hybrid model can bring traditional financial systems and modern blockchain networks together.

Read on to know how Citi and Swift achieved this milestone and how exactly it works.

This was achieved by using Swift’s existing infrastructure, which was further enhanced with secure blockchain connectors, orchestration tools, and smart contracts.

How It Works

Citi and Swift created a messaging system that tracks the end-to-end process. It also includes an escrow mechanism to handle irreversible blockchain transfers, that ensures PvP settlement and eliminates the risks for both parties.

A central system coordinated the message flow between fiat and digital currency transactions to ensure the synchronisation and finality. For the trial, Citi used test USDC tokens on Ethereum’s Sepolia network to simulate real-world conditions.

Citi and Swift will continue to refine this approach with the broader financial community and build the standards needed for secure, scalable digital asset transactions.

Enhancing Payments With Blockchain

“These trials with Swift mark a big step forward in building the kind of infrastructure needed for digital currency transactions,” said Ayesa Latif, Head of FX Products. 

Jonathan Ehrenfeld, the Head of Strategy at Swift, highlighted Swift’s role as a trusted bridge between the tokenized systems and the global financial community, using its existing network while adding the tools needed for fiat-digital currency settlement.

Rising Demand For Stablecoins

Citi GPS expects the stablecoin market alone to grow to nearly USD 1.9 trillion by 2030 as new use cases emerge and regulations become clearer.

Stablecoin volumes are nearing USD 1 trillion a month, but they are mostly used as a bridge and often converted back to local currency.

Making Cross-Currency Settlement Easier

Settlement between fiat and digital currencies remains tricky because they work differently as fiat is held in bank accounts and digital assets on blockchains. Current FX tools can identify digital assets but they are not designed to settle both at once. 

This is exactly what Citi and Swift are aiming to tackle with this initiative. 

Citi’s Push Into Digital Assets

Citi has been making big moves in digital assets.

In October, it teamed up with Coinbase to make payments easier for institutional clients. It also revealed plans to connect its blockchain-based Token Services with 24/7 USD Clearing to offer round-the-clock cross-border payments.

Looking ahead, Citi aims to launch crypto custody services in 2026 to hold digital assets for clients.