7 months ago
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SWIFT aims to launch a new platform in the next two years to connect central bank digital currencies to the existing finance system in a bid to boost the CBDC ecosystem.
Global financial messaging network SWIFT is planning to launch a new platform within the next one to two years to integrate the forthcoming wave of central bank digital currencies (CBDC) with the existing financial system, a spokesperson for SWIFT told Reuters.
With approximately 90% of the world’s central banks exploring digital currency options, SWIFT’s initiative underscores a collective effort to keep pace with advancements in crypto like Bitcoin while grappling with technological intricacies.
Nick Kerigan, SWIFT’s head of innovation, disclosed that the organization’s latest trial, which lasted six months and involved nearly 40 central banks, commercial banks, and settlement platforms, marked one of the largest global collaborations on CBDCs and tokenized assets to date.
“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.” Nick Kerigan
In a blog announcement, SWIFT said that its connector was able to “interlink multiple asset and cash networks, and could facilitate atomic delivery versus payment across those platforms.” According to the trial report, the pilot engaged central banks from several countries, including Germany, France, and Australia among others.
Tom Zschach, SWIFT’s chief innovation officer, emphasized the organization’s ambition to address the challenge of fragmentation across the industry, underscoring the significance of this milestone achievement.
However, despite SWIFT’s integration efforts, not all countries are rushing to develop their digital currencies. Concerns persist regarding technological and regulatory hurdles, as highlighted by Sweden’s Riksbank, which emphasized the need for extensive technical and regulatory development to ensure secure offline payments with e-kronas.
In a recent testimony before the Senate Banking Committee, Federal Reserve Chair Jerome Powell also indicated that the Federal Reserve is not yet ready to recommend or adopt a CBDC, reassuring the public that there is no imminent rollout of a central bank digital currency.
