According to Michael Miebach, the cross-border payment system will cease to exist in 5 years

Mastercard CEO: national cryptocurrencies will be able to replace SWIFT

31.05.2022 - 11:00

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2 min

What’s new? Mastercard CEO Michael Miebach has said that the SWIFT cross-border payment system may be replaced by central bank digital currencies (CBDCs). At the World Economic Forum in Davos, Miebach was the only one to respond in the negative to a question about the viability of SWIFT, CoinDesk reports. In his view, the system of cross-border payment may cease to exist in 5 years.

CoinDesk’s material

How did the company comment on Miebach’s statement? Mastercard representatives tried to tone down the company’s head harsh response a bit, saying that the question requires a more detailed answer than a simple “yes” or “no”.

“Michael was simply reinforcing what SWIFT has previously said – their operations continue to evolve. Its current form will not be the same in the future. They are adding more functionality and moving past just being a messaging system,” Mastercard representatives explained.

SWIFT is an international system for the transmission of financial messages between banks, founded in 1973 by 248 banks from 19 countries. SWIFT is a cooperative society under Belgian law and is owned by its members.

What happened before? SWIFT, a payment operator, began testing transfers using CBDCs. During this initiative, the operator entered into an agreement with the consulting company Capgemini. SWIFT experts noted that there was currently a risk of fragmentation of the global CBDC system due to different digital currency standards in central banks.

Mastercard teamed up with the crypto lender Nexo to launch the world’s first payment card to be backed by cryptocurrency. The card’s issuer would be the financial app, DiPocket. The card would allow one to spend without having to sell one’s digital assets, which are used as collateral to back the credit granted.

Author:

Vasiliy Smirnov Vasiliy Smirnov

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