Why you should not compare SWIFT and blockchains

I’ve been talking a lot about stablecoins of late and, in a timely fashion, Jas Shah at Fintech: Under the Hood has just landed a great primer all about such things.

A Stablecoin Primer: Money for the Digital Age

TL;DR Quick Take

• Stablecoins have evolved from early crypto-pegged concepts to fiat-backed instruments like USDC and USDT with vastly improved legitimacy and utility.
• Infrastructure spans blockchain rails, FX, custody, compliance, and applications—enabling faster, cheaper cross-border payments.
• Market Opportunity remains under 1% of global cross-border flows but has a TAM in the trillions.
• Programmable Payments and emerging network models are innovations to watch.
• Regulation—especially in the U.S. (via the GENIUS Act) and EU (MiCA)—is advancing rapidly, with compliance a key concern to resolve.
• Monetary Implications include both potential benefits and risks to financial stability, central bank strategy, and currency sovereignty.

What I really liked is two sections of his update. First, a summary of history – if you want a longer version, buy Digital Human – where Jas notes that there are generations of how we trade money:

• Paper made money portable;
• Fiat made it flexible;
• Cards extended trust into credit;
• Digital brought global accessibility; and
• Stablecoins are the logical next step in the evolution of money.

Why?

Because it is reinventing money for global digital platforms. The thing that is confusing people is that there are many layers to the new digital platforms that are not standardised or organised yet. But we are getting there. Effectively, there are four layers to the new rails and plumbing of payments:

• Layer 0 ensures networks connect - The Cleared and Standardised ground
• Layer 1 provides trust and finality - The Highways
• Layer 2 delivers speed and efficiency - The Express Lanes
• Layer 3 makes it usable in everyday life - The Cars

And this is where there are many misconcpetions. For example, I’ve seen many people saying that Stripe’s Tempo and Tether’s stablecoin will replace SWIFT. They’ve got it wrong. You have to remember that SWIFT is a messaging network and governance layer. Tempo isn't trying to be those things. Equally, Tether is competing with Solana, Arc and Base, not with SWIFT. It is a stablecoin and not a messaging system. There are massive differences.

Specifically, SWIFT messaging does not fit neatly into a Layer 1 or Layer 2 classification in the blockchain sense, as it is a traditional financial messaging network, not a blockchain protocol. Having said that the ISO 20022 standard, which SWIFT uses for its messaging, is sometimes discussed in terms of layers, with the first layer focusing on the business model, the second on the logical message structure, and the third on the physical syntax.

But there are few synergies between Stablecoins, Tether, Tempo, blockchain layers and the SWIFT network, so don’t expect any big change soon, as there has always been a lot of people saying they can replace the bank's chosen messaging system. The difference today is that there is a viable alterntive using new protocols ... if the banks choose to use them.