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Swift starts testing interlinking CBDC solutions with three central banks

Thursday 14 September 2023 12:18 CET | News

Swift has announced that three central banks are beta testing its solution for interlinking CBDCs, while financial institutions are experimenting with the solution to explore further use cases.

Swift has stated its commitment to developing a beta version of its CBDC connector solution after the first iteration of sandbox testing. As per the press release, participants are recognising the solution’s potential and possible value. The beta solution has taken its next step, with three central banks and monetary authorities, including the Hong Kong Monetary Authority (HKMA) and the National Bank of Kazakhstan, integrating the solution with their infrastructure for direct testing.

Furthermore, Swift has also begun its second phase of sandbox testing with commercial banks, central banks, and financial market infrastructures exploring additional use cases. These include trigger-based payments for digital trade platforms, foreign exchange models, delivery vs. payment, and liquidity-saving mechanisms. Swift has stated that The Reserve Bank of Australia, Deutsche Bundesbank, HKMA, Bank of Thailand, and CLS are among the group of more than 30 institutions in this second phase.  

Swift has announced that three central banks are beta testing its solution for interlinking CBDCs, while financial institutions are experimenting with the solution to explore further use cases.

 

CBDC Interoperability Initiatives 

According to The Atlantic Council, 130 countries, representing 98% of GDP, are exploring CBDCs. Moreover, 19 of the G20 countries are in the advanced stages of CBDC development, with nine already in pilot. However, there is a possibility that this development could lead to a fragmented landscape across borders, as most countries focus on domestic usage.

To counter this, Swift has stated that it has prioritised focus within its agenda on interoperability for digital currencies and tokenised assets to enable them to seamlessly scale if and when they are deployed into the financial ecosystem. In the first phase of Swift's experiments and sandbox testing, almost 5,000 transactions were simulated between two different blockchain networks and with existing fiat-based payment systems.  

About Swift 

Swift is a global member-owned cooperative and a provider of secure financial messaging services. It provides a platform for messaging and standards for communicating. It also offers products and services to facilitate access and integration, identification, analysis, and regulatory compliance.

The platform, products, and services connect more than 11,500 banking and securities organisations, market infrastructures, and corporate customers in more than 200 countries and territories. Headquartered in Belgium, Swift’s global office network aims to ensure an active presence in all the major financial centres. 

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Keywords: tokenization, cryptocurrency, digital currency, digital assets, financial institutions
Categories: DeFi & Crypto & Web3
Companies: SWIFT
Countries: World
This article is part of category

DeFi & Crypto & Web3

SWIFT

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