A major development in global payments is taking shape after Citi and Swift completed a successful experiment showing that fiat money and digital assets can now be exchanged simultaneously using a Payment-versus-Payment (PvP) model.
Key Takeaways:
Citi and Swift successfully settled fiat and blockchain assets at the same time using a PvP model.
The test enhanced Swift’s current network with smart contracts instead of replacing banking rails.
The breakthrough paves the way for institutional-scale digital asset and stablecoin settlement.
The results suggest that traditional financial rails and blockchain networks may soon be able to work in sync instead of in competition.
Merging Two Worlds Instead of Replacing One
Rather than designing a new network from scratch, the trial upgraded Swift’s existing infrastructure with blockchain-specific components — including smart contracts, orchestration tools, and secure on-chain connectors. The aim was not to build a “crypto-only” transfer system, but to create a hybrid model where banks can interact with tokenized assets without abandoning the systems they already use.
The experiment revolved around a coordinated messaging layer that monitored every step of the transaction. A dedicated escrow function ensured that a blockchain transfer could not go through unless the fiat leg was confirmed, eliminating settlement risk. The system handled both sides automatically, ensuring that neither party was exposed at any point in the process.
To replicate live market conditions, Citi used test USDC tokens on Ethereum’s Sepolia network — demonstrating that blockchain assets can be synchronized with traditional FX flows without manual intervention.
Industry Momentum Is Building
Both organizations are treating this as a starting point rather than an endpoint. Swift plans to refine the framework with the wider financial sector to standardize messaging, interoperability and security for large-scale digital asset settlements. Citi echoed the sentiment, saying the work is part of building global infrastructure for institutional adoption rather than isolated pilot programs.
Citi’s research division expects momentum to accelerate rapidly. It forecasts that the stablecoin sector alone could approach $1.9 trillion by 2030, driven by regulated use cases and institutional participation. Monthly stablecoin transfer volume is already nearing $1 trillion, even though most activity today is still transactional — used as a temporary bridge before converting back to national currencies.
Why Settlement Is Still the Missing Piece
Even though FX systems can identify tokenized assets today, they were never built to finalize both fiat and blockchain payments in perfect sync. That gap has been one of the biggest bottlenecks preventing widespread use of digital dollars in global finance. The Citi–Swift model directly targets that problem by allowing both legs of a transaction to settle at the same moment, regardless of whether one side moves through banks and the other through blockchains.
The trial is not an isolated effort for Citi. The bank recently partnered with Coinbase to streamline institutional payments and announced plans to link its Token Services platform with 24/7 USD clearing to enable round-the-clock cross-border transactions. Looking ahead, Citi is preparing to roll out digital asset custody services in 2026, reinforcing its position as one of the large banks most invested in blockchain-driven financial infrastructure.
