Swift outlines its mission to digitise global trade

Trade is a key focus area for Swift, accounting for over 50% of cross-border customer payments made over the network. As such, supporting the broader trade digitisation journey is integral to the cooperative’s vision of delivering instant and frictionless transactions and an interoperable future state.

Swift is currently working on two notable projects to support trade digitisation and reduce fragmentation in the industry: Standardisation of the corporate to bank (C2B) communication through the development of trade APIs, and the electronic presentation of trade documents, including electronic bills of lading.

Together with the International Chamber of Commerce (ICC), Swift has been working to develop a corporate to bank guarantee API. The resulting open API solution streamlines the corporate-to-bank processes involved in both guarantees and standby letters of credit, has a light footprint, and provides ISO 20022-ready structured data.

Banks, corporates and platforms are currently taking part in a pilot to validate the effectiveness of this solution. Seven banks are already in the process of implementing C2B Guarantee APIs, and two further trade platforms – Komgo and Surecomp – are using the APIs to allow corporates to better interoperate with banks via their platforms.

On the digitising trade documents front, Swift successfully tested an interoperability model last year that uses APIs to speed up the exchange of an electronic bill of lading (eBL) between different trade platforms in collaboration with Swift’s FIT Alliance partners and eBL platform providers. The interoperability model isn’t limited to bills of lading – other trade documents, such as invoices, certificates of origin and packing lists, can likewise be packaged into a PDF or digital form.

Now, Swift is building on its initial collaborative innovation trials last year. It recently worked with the trade platform WaveBL on a proof of value project to demonstrate how Swift can support the end-to-end electronic exchange of eBLs and other related shipping documents in the near term, using the digital file transfer service FileAct. The tests proved successful, enabling the end-to-end transfer of these documents that are maintained and managed by approved IGP&I club platforms, such as WaveBL.

Building on this initiative, Swift is now working with a number of banks and trade platforms to validate the feasibility of exchanging a full set of trade documents in PDF form using FileAct and FIN messages, with the platforms joining Swift. As banks already use FileAct and FIN on a daily basis, the solution is easy to implement, with little impact on end users.

Swift says that as it progresses, its goal is to enable banks, corporates and the broader financial community to leverage their existing Swift infrastructure without incurring significant development costs. The cooperative says it believes this will significantly lower the barriers to entry for players to use digital trade documents and will support the broader trade digitisation agenda.

 

ECB cuts interest rates a further 25 basis points 

The ECB’s Governing Council has lowered the three key ECB interest rates by 25 basis points. Accordingly, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 3.00%, 3.15% and 3.40% respectively, with effect from 18 December, 2024. 

The ECB’s monetary policy statement says that the disinflation process is well on track. Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.

Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis. Domestic inflation has edged down but remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay.

Financing conditions are easing, as the Governing Council’s recent interest rate cuts gradually make new borrowing less expensive for firms and households. But they continue to be tight because monetary policy remains restrictive and past interest rate hikes are still transmitting to the outstanding stock of credit.

ECB staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter. Staff see the economy growing by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027. The projected recovery rests mainly on rising real incomes – which should allow households to consume more – and firms increasing investment. Over time, the gradually fading effects of restrictive monetary policy should support a pick-up in domestic demand.

The Governing Council is determined to ensure that inflation stabilises sustainably at its 2% medium-term target. It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. The Governing Council is not pre-committing to a particular rate path.

Commenting on the rate cut, Harry Woolman, Analyst at Validus Risk Management, said: “[The rate cut] comes as an immediate relief to the euro, with forecasters split almost 50-50 between a larger 50 bps cut and a 25 bps move ahead of the meeting. However, policymakers will have to tread carefully as they publish revisions to economic growth and inflation forecasts. Recent economic underperformance has seen market expectations shift to anticipating more rate cuts throughout 2025 – up to as many as 5 further 25 bps moves – with a terminal rate in easing territory, below 2%. Christine Lagarde’s comments will be heavily scrutinised to garner the central bank’s thinking amid political turmoil in both France and Germany. In any case, we anticipate the euro to remain under pressure in the short-term.”

 

German exporters tread water as Europe downturn offsets other demand growth

November data indicated that global demand conditions were close to stalling, following a fractional improvement in the previous month. At 50.1, down from 50.3 in October, the headline HCOB Germany Manufacturing PMI Export Conditions Index remained below its long-run average (52.2). That said, the index has now posted above the 50.0 no-change value in eight of the past ten months.

Trade-weighted economic growth accelerated sharply in North America, with the respective index at its highest level since April 2022 (54.1). Stronger export conditions partly reflected a rebound in business investment and greater willingness to commit to new projects following the conclusion of US elections.

Improved growth conditions were also seen in Asia (52.1). The modest upturn was supported by an accelerated pace of economic expansion in Mainland China, as well as rising business activity across India and a number of ASEAN nations.

Europe was once again the weak spot for export conditions (48.1). Economic activity on a trade-weighted basis contracted for the sixth month running and at the sharpest rate since July. France posted a particularly steep downturn in private sector output, with the HCOB Composite PMI dipping to its lowest for ten months in November.

The seasonally adjusted HCOB Germany Manufacturing PMI New Export Orders Index registered 43.4 in November, down slightly from 44.6 in October and broadly in line with the trend seen in 2024 to date. The rate of decline in new export orders remained much faster than the global benchmark (48.6).

Once again, the vast majority of economies monitored by PMI surveys (21 out of 29) experienced a decrease in new orders from abroad. Spain and Greece were the only European economies to buck the downward trend. France, Italy and Austria respectively registered the fastest declines. Asia also saw some pockets of growth in November (led by India), while the US manufacturing sector saw the steepest drop in export sales since June 2023.

Weaker export order books were seen in three of the four monitored sub-sectors. Chemicals producers were the top-performing category in the manufacturing sector and the only segment to register an overall expansion (51.7). Survey respondents typically commented on a boost from rising global demand for raw materials.

At the other end of the scale, Automobiles & Auto Parts (29.4) signalled another rapid decline in new export orders amid lacklustre overseas demand and ongoing structural challenges in the sector.

Machinery & Equipment (46.3) and Consumer Non-cyclicals (46.4) posted further reductions in new business from abroad, but the latter saw the slowest fall for two-and-a-half years. Producers of Machinery & Equipment commented on postponed decision-making on investment spending by clients due to geopolitical tensions and US elections.

 

Paxos and Standard Chartered join forces on stablecoin reserve management

Paxos, a regulated blockchain and tokenisation infrastructure platform, has partnered with Standard Chartered to enhance Global Dollar (USDG) and Lift Dollar (USDL) reserve management. Through this collaboration, the bank will provide cash management, trading, and custody services, further strengthening the infrastructure supporting the trusted digital assets in Singapore and UAE.

Both USDG and USDL are fully backed and trusted stablecoins issued under prudential regulatory oversight. Paxos says it maintains rigorous standards in reserve management and exclusively holds short-term, highly liquid US government securities and cash equivalents to ensure that stablecoins maintain 1:1 parity with the US dollar. This guarantees seamless convertibility to fiat currency while reinforcing trust in Paxos’ ecosystem.

Through this collaboration, Standard Chartered will support Paxos’ global tokenisation platform by offering seamless integration with a comprehensive suite of banking capabilities across transaction banking, financial markets, and securities services. With a strong commitment to engaging with global regulators, Standard Chartered delivers tailored solutions to navigate the complexities of digital asset custody. This relationship also simplifies how companies can access Paxos’ suite of trusted stablecoins.

 

Visa Direct to make funds available in US cardholders’ bank accounts in a minute or less

Visa has announced that with its Visa Direct service, funds transferred to US bank accounts will be available within one minute or less from April 2025. Businesses, governments, and consumers can use Visa Direct to deposit funds into bank accounts linked to eligible debit cards in real time. Visa Direct reaches 99% of bank accounts in the US and over 11 billion endpoints, including cards, accounts and digital wallets worldwide.

This update opens new avenues for businesses and governments to grow. With faster funds availability, organisations can enhance their operational efficiency, deliver better customer experiences, and foster trust among their clients. Whether disbursing government benefits, processing healthcare payments, or handling tips in the service industry, the improved speed and reliability of money movement will let businesses and governments to operate in real-time more effectively.

“Faster payments are crucial for the modern economy, and this move by Visa is a significant step forward,” said Reed Luhtanen, Executive Director and CEO, U.S. Faster Payments Council (FPC). “Upgrading the US payment system is essential for secure, near-immediate funds availability.”