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SWIFT’s CBDC pilot test shows promising results for cross-border payment

SWIFT's CBDC pilot test shows promising results for cross-border payments

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TL;DR

  • SWIFT released a statement announcing positive outcomes from their pilot test connecting various Central Bank Digital Currencies (CBDCs).
  • SWIFT simulated nearly 5,000 transaction scenarios between blockchain networks and existing fiat payment systems, involving 18 financial institutions from around the globe.

On March 9, SWIFT, the global interbank messaging platform, released a statement announcing positive outcomes from their pilot test connecting various Central Bank Digital Currencies (CBDCs). The encouraging results suggest increased collaboration between central banks and financial institutions.

During a 12-week testing period, SWIFT simulated nearly 5,000 transaction scenarios between blockchain networks and existing fiat payment systems, involving 18 financial institutions from around the globe. These included the Royal Bank of Canada, Banque de France, Société Générale, BNP Paribas, Monetary Authority of Singapore, HSBC, Deutsche Bundesbank, NatWest, and more.

Results of the sandbox testing showed that Swift’s interlinking solution could meet the requirements for Central Bank Digital Currency (CBDC) interoperability in cross-border payments. Moreover, according to SWIFT, their solution effectively enables the successful usage of CBDCs in such transactions.

SWIFT reported a high degree of consensus amongst participants on how CBDCs could function in the future. Therefore, as part of its next steps, it plans to enter a second phase for its CBDC sandbox and create a beta version for payments with enhanced atomicity using its interlinking solution.

Within the next two years, the OMFIF Digital Monetary Institute expects 24% of central banks to have implemented Central Bank Digital Currency (CBDC) solutions. Currently, more than 110 central banks around the world are exploring potential use cases for CBDCs.

“For CBDCs to deliver real-time cross-border payments, interoperability is essential. However, as the experimentation with different technologies and standards widens, so does the potential risk of fragmentation.”

Lewis Sun, Global Head of Domestic and Emerging Payments at HSBC.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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