SWIFT, one of the biggest messaging platforms globally, has revealed that it is planning on testing several CBDCs. According to the platform, the sim of the test is to ensure that the CBDCs are fit for cross-border transfer. In a statement by the company, the test will be carried out by interlinking the several CBDCs to each other using their networks.
Most CBDCs lack cross border transfer feature
SWIFT intends to onboard an international technology company based in France and Capgemini to help work on the project. Notably, SWIFT is responsible for the network that links several financial powerhouses worldwide. This enables them to carry out transactions and communications swiftly. According to the statement from its official blog, most of the CBDCs that countries are developing lack the ability to carry out transactions across borders.
This is because most of the designs were based on function inside the individual countries. However, a top executive has stated that CBDCs must have a network to help them work across their borders. He also said that the company wants to be involved in creating such a network. Another party in the company also states that since CBDCs are new, they could work on more projects that would work for hand in hand with the payments system.
SWIFT plans to develop a gateway
The payment company’s network is now being leveraged by more than 11,000 banks located in over 200 countries. With that, exploring the possibility of making CBDCs cross border would be a welcome development. The company also mentioned that it would develop a gateway that will connect all the CBDC networks. So when someone makes a transaction, it will go straight to the SWIFT gateway, where it undergoes needed conversions before being sent to the receiver. Its report said that Capgemini would be responsible for all the switches from different CBDCs and FIAT on the network.
Also, SWIFT has mentioned that the company is also looking to explore the option of adding other digital assets. SWIFT has garnered a lot of recognition in the last few years for its excellent messaging and payment service. However, it has faced a turgid time over the exclusion of Russia from Europe based on the current bad blood between the country and Ukraine. With most of the financial companies ordered to cut their services from the region, SWIFT has been unstable in the last few months.