SWIFT, the global bank messaging network, is set to launch a platform within 1-2 years to integrate the emerging central bank digital currencies (CBDCs) with the current financial system, Reuters reported on Tuesday.
This significant development aims to align with the launch of major CBDCs, as 90 per cent of the world’s central banks are developing digital currencies to keep pace with cryptocurrencies.
Nick Kerigan, SWIFT’s head of innovation, revealed that a six-month trial involving 38 central banks and financial institutions has successfully tested interoperability among different CBDCs, even those built on varying technologies.
This could minimise fragmentation in payment systems and enable complex trade and foreign exchange transactions, with automation possibilities to increase speed and reduce costs.
The trial’s success, demonstrating compatibility with existing banking infrastructure, has provided SWIFT with a clear timeline for productisation.
While the exact timing may adjust based on CBDC rollouts, the platform’s introduction is crucial for SWIFT to maintain its role in the global banking network.
Currently, countries such as the Bahamas, Nigeria, and Jamaica have operational CBDCs, with China conducting trials of an e-yuan and the European Central Bank (ECB) progressing with a digital euro. The Bank for International Settlements (BIS) is also conducting cross-border trials.
SWIFT’s network, already spanning over 200 countries and connecting more than 11,500 banks and financial institutions, facilitates the transfer of trillions of dollars daily, positioning it as a pivotal player in the integration of CBDCs into mainstream finance.
