SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

SWIFT, the network that provides the messaging system for cross-border banking settlements, has announced plans to launch a CBDC equivalent of its current network in the next two years. The organization recently completed a 6-month test to assess the viability of such a development, which included the participation of 38 institutions, including central banks and financial institutions.

SWIFT Seeks to Launch Linking Platform for CBDC

The Society for Worldwide Interbank Financial Telecommunication (SWIFT), operators of the de-facto standard network that links private banks worldwide, will enter the central bank digital currency (CBDC) payment business. The Belgium-based cooperative has announced plans to launch a CBDC platform that will interlink different national digital currencies with the current financial system.

SWIFT’s determination comes after a 6 months pilot to determine the feasibility of such a solution. The pilot was qualified as a success and had the participation of 38 financial organizations including central banks, private banks, and others.

SWIFT’s head of innovation, Nick Kerigan, told Reuters about the possible timeline for this interconnection network’s launch. In an interview with Reuters, he detailed:

We are looking at a roadmap to productize (launch as a product) in the next 12-24 months. It’s moving out of experimental stage towards something that is becoming a reality.

While 90% of the world’s central banks are examining the possibility of issuing digital versions of their currencies, only a few have moved into production. Bahamas, Nigeria, and Jamaica have already launched their CBDC, while China has an advanced ongoing pilot.

Nonetheless, SWIFT’s move could establish the rails for a centralized CBDC system even after these currencies are issued, seeking to occupy the space before its competitors. This is possible because SWIFT’s interlinking systems are independent of the architecture of each one of the digital currencies that will use them.

Other platforms that seek to agglomerate CBDCs and facilitate trading and payments with them are in development. Project Mbridge, a platform that groups digital currencies of UAE, China, Hong Kong, and Thailand, reached a milestone in January, intermediating the first digital dirham cross-border payment.

Source : Bitcoin News by Sergio Goschenko / Mar 29, 2024