LONDON – The global financial messaging network, SWIFT, has announced plans to develop a new platform within the next one to two years aimed at integrating central bank digital currencies (CBDCs) with the existing financial system. This initiative marks a significant step towards enhancing the interoperability of digital currencies worldwide, with SWIFT playing a pivotal role in the evolution of the global banking landscape.
As digital currencies gain momentum, with approximately 90% of the world’s central banks currently exploring or developing their CBDCs, the need for a unified platform to ensure seamless transactions across various digital currencies has become increasingly apparent. SWIFT’s move comes in response to this growing demand, as well as the desire to stay ahead of the rapid advancements in cryptocurrency technologies.
Nick Kerigan, SWIFT’s Head of Innovation, highlighted the success of recent trials that involved a diverse group of 38 participants, including central and commercial banks as well as settlement platforms. These trials focused on the interoperability of CBDCs built on different technological foundations, aiming to minimize fragmentation in payment systems and explore the potential for automation to enhance efficiency and reduce the costs of transactions.
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The trials, which spanned six months, demonstrated that banks could leverage their existing infrastructure to adapt to CBDCs, prompting SWIFT to consider a more concrete timeline for the platform’s launch. “It’s moving out of the experimental stage towards something that is becoming a reality,” Kerrigan stated, emphasizing the positive feedback from participants and the potential for productization within the next 12 to 24 months.
This development is timely, considering the launch of CBDCs in countries like the Bahamas, Nigeria, and Jamaica, as well as ongoing trials of the e-yuan in China and a digital euro project in the European Union. SWIFT’s existing network, which connects over 11,500 banks and financial institutions across more than 200 countries, positions it as a key player in facilitating the global adoption of digital currencies.
The firm, which gained widespread attention following its decision to disconnect several Russian banks in response to sanctions in 2022, sees its role in the CBDC ecosystem as an extension of its current operations. Despite the potential for similar sanctions in the future, Kerrigan believes that the advantages of a unified CBDC platform would encourage widespread participation.
With predictions from the Boston Consulting Group indicating that around $16 trillion worth of assets could be tokenized by 2030, SWIFT’s initiative could provide a scalable solution for the financial industry, allowing for the efficient handling of digital asset payments and fostering a more interconnected and agile global economic system.
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