Global funds transfer provider SWIFT is testing CBDCs to ease the challenge of cross-border transactions.
SWIFT is testing interconnecting multiple CBDC networks for cross-border transactions. The Belgium-based network, which enables financial institutions to communicate with each other for global payments, teamed up with French information technology services and consulting firm Capgemini for the move.
According to the official statement, SWIFT stated that the cross-border use of CBDCs could be a blind spot for this type of digital currency because it was developed mainly for the implementation of domestic policies. Thomas Zschach, SWIFT’s Chief Innovation Officer, believes that different CBDC systems should work together seamlessly, and that SWIFT should play a role in this.
“It will be critical to facilitate and connect interoperability between the different CBDCs under development worldwide and realize their full potential. Today, the global CBDC ecosystem is at risk of fragmentation, with multiple central banks developing their own digital currencies based on different technologies, standards and protocols”
Nick Kerigan, Head of Innovation at SWIFT, said that CBDCs are increasingly “fiat He said that it will be perceived as “a new form of money” and that more than one platform will be developed in parallel with the traditional payment system to integrate with the traditional financial infrastructure.
With its technology solutions accessible by more than 11,000 financial institutions in over 200 countries, SWIFT aims to potentially provide a “highly scalable and easily integrated solution” for international payments via CBDCs.
