a fiat currency is converted into the digital asset at the originating bank, this is then transmitted to the receiving bank where the digital asset is exchanged as a different fiat currency.
I find it amusing. These smarty pants are trying to lower the enormous transactions fees between the banks from different countries, but are not willing to let fiat go at the same time! So, they take fiat A, sell it for a crypto, send this crypto to the holder of fiat B and that holder then sells the crypto for fiat B! How sophisticated is that! And yet so weird and stupid. Why use three currencies and three operations when one can use one? It's a nice transitory stage, but I think that it cannot work as a general resolvement of the fiat-crypto rivalries. Adopting blockchain is a good thing, but IMO it should be adopted fully, not as a mediator between two 'real' things.