Avalon Ingram: Banks Are Done Experimenting With Tokenization

Avalon Ingram argued that institutional adoption of digital assets is no longer an open question: banks have moved from debating blockchain to testing business outcomes. Swift’s blockchain ledger went live in July, and 17 banks were transacting on it nine months after its announcement. Ingram recalled reading that banks had spent about $100 billion on tokenization since 2020, underscoring the scale of investment behind the shift. Swift’s effort is aimed at wholesale interbank activity, not retail payments.

The ledger is an MVP and a foundational step, not a complete end-to-end settlement system. Swift messaging remains in use; the ledger records information such as value, currency, and the parties involved, then tracks the resulting state. Swift can orchestrate settlement, but it does not complete it: banks still settle through correspondent accounts or real-time gross settlement systems. That reflects, in part, the limited availability of suitable on-chain settlement venues. The project is therefore a technology upgrade to existing processes, rather than a replacement for the mechanisms that transfer funds.

Liquidity optimization is a leading use case. Corporate treasurers are interested in putting trapped liquidity into yield-bearing instruments, while banks are exploring ways to manage interbank obligations more efficiently. The ledger can record obligations and net them when a settlement window closes; windows can be configured around counterparties, credit lines, or exposure limits. Banks want interbank settlement to operate 24/7, but that depends on settlement venues also being available around the clock. Ingram said a 24/7 RTGS system with real-time completion notifications could enable settlement without blockchain, though she considered blockchain the more elegant approach.

Swift’s model is closer to commercial bank money recorded on a private ledger than to conventional tokenized deposits: banks do not need to tokenize customer deposits for the ledger to record funds. Ingram distinguished this from both tokenized deposits and stablecoins. A tokenized deposit is a liability of one commercial bank and generally cannot be exchanged as if it were another bank’s deposit. A stablecoin may function as a consortium-based settlement asset, but it is portable only when the recipient accepts it, and its rules differ by jurisdiction. The ledger’s development will partly depend on how jurisdictions regulate deposit tokens, e-money tokens, and CBDCs.

Settlement preferences are not uniform across markets. Ingram said wholesale CBDCs are comfortable in Asia, while Europe is seeing consortium-based stablecoins alongside continued interest in CBDCs. She argued that a flexible model should accommodate jurisdictions that favor CBDCs rather than assume one settlement asset will suit every market. Five of the 17 banks live on Swift’s ledger are based in the Eastern Hemisphere. Ingram said Asian banks bring substantial tokenization experience and that payment innovation has helped prepare them to explore further, while acknowledging that her comparison may be biased because she has been based in Asia for seven years. Customer-focused discussions are happening in both regions, even if organizations start with different levels of experience.

The working group included just over 40 banks, but the pilot was limited to institutions with a tokenized-deposit platform or private ledger; 17 joined, compared with an initial expectation of about six. Ingram said progress should be measured through customer value, recurring transaction volume, and demand for adoption, not simply the number of participating banks. She expects banks to join iteratively. Building a private ledger may be difficult to justify for smaller banks with only one or two correspondent banking relationships, although a more mature shared ledger could eventually reduce the need for every bank to build its own.