FAB and Citi Complete 24/7 USD Payments With Tokenized Deposits Through Swift

First Abu Dhabi Bank (FAB) has completed live U.S. dollar transactions at scale through Swift’s Ledger Minimum Viable Product (MVP), using tokenized deposits and smart contract-based settlement to support 24/7 cross-border payments.

The transactions were completed bilaterally with Citi, testing the interaction between Swift’s existing payment messaging infrastructure, tokenized bank deposits and distributed ledger technology.

FAB said it is the first bank in the Middle East and Africa to reach the milestone, adding another step to its efforts to bring tokenized money and blockchain infrastructure into institutional payments.

The development follows Swift’s move earlier this year from designing its blockchain-based ledger to building an MVP for real-world transactions. Swift’s earlier coverage on the tokenized-deposit ledger described the initiative as an interoperability and orchestration layer designed to connect tokenized deposits while preserving existing banking and settlement infrastructure.

Tokenized Deposits Meet Existing Payment Rails

The FAB-Citi transaction demonstrates how tokenized commercial bank deposits can be used within a payment framework that continues to rely on established financial infrastructure.

The tokenized deposits remained on the participating banks’ balance sheets. Swift Ledger coordinated payment commitments and recorded the corresponding interbank liabilities without taking custody of the funds.

Interbank settlement itself remained separate from the ledger and was completed through established correspondent banking channels.

The structure is significant because it does not require banks to replace existing liquidity, settlement or risk-management arrangements in order to introduce blockchain-based coordination into cross-border payments.

Swift has positioned its ledger along similar lines, describing the project as a shared layer that can help institutions coordinate tokenized-money transactions while maintaining existing compliance and settlement models.

FAB Builds on Earlier Blockchain Payment Tests

FAB’s participation also builds on a longer-running effort by the bank to use blockchain technology for cross-border payments.

In 2023, FAB completed a pilot with J.P. Morgan’s Coin Systems to test blockchain-based cross-border payments, using J.P. Morgan’s permissioned distributed ledger infrastructure for the transfer and settlement of value.

The latest Swift Ledger transaction moves that experimentation into a broader banking network, connecting tokenized deposits with an infrastructure already used for global financial messaging.

FAB Expands Its Digital Money Strategy

The transaction also fits into FAB’s wider push into regulated digital money.

In February, theCentral Bank of the UAE approved FAB’s AED-backed DDSC stablecoin for operational deployment, making it the fourth UAE dirham-backed stablecoin initiative to receive federal approval.

DDSC has since moved into institutional use, including an AED 110 million transaction executed on ADI Chain in May.

Together, these developments show FAB pursuing several forms of blockchain-based financial infrastructure, from tokenized deposits and cross-border payments to regulated stablecoins.

Swift Pushes Toward 24/7 Banking Infrastructure

The FAB transaction comes as Swift works to move its blockchain initiative toward broader real-world use.

The ledger is intended to support interoperable tokenized deposits and continuous cross-border payments without creating a separate system disconnected from existing banking infrastructure.

FAB said it will continue working with Swift and other participating institutions on future phases covering expanded interoperability, 24/7 cross-border settlement and programmable treasury solutions for institutional and corporate clients.

The broader significance is therefore less about replacing correspondent banking than about adding a blockchain-based coordination layer to it.

As banks continue experimenting with tokenized deposits, the FAB-Citi transaction provides another example of how commercial bank money could operate in an always-on payment environment while remaining within existing institutional and regulatory frameworks.