SWIFT srtarted testing international payments in CBDCs
The initiative aims to link national digital currencies into a global system
22.05.2022 - 07:00
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What’s new? SWIFT, a payment operator, in cooperation with the consulting company Capgemini, has started testing international transfers using central bank digital currencies (CBDCs). A report on the SWIFT website states that this is a new step towards seamless cross-border payments using national digital currencies.
What is known about the testing? SWIFT experts note that there is currently a risk of fragmentation of the global CBDC system due to central banks using different standards and protocols to develop their national currencies. The report states:
“This time, in collaboration with Capgemini, we are testing how SWIFT can interlink the multiple domestic-based CBDC networks emerging worldwide to make cross-border payments with CBDCs more seamless and frictionless.”
How will the testing take place? The experiments will deploy gateways on the various CBDC networks. These will intercept international transactions and send them to the SWIFT platform for transfer to another CBCD network or payment system
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 events happened before? In March, the Bank of Uganda (BOU) began exploring the possibility of issuing a national digital currency.
In April, analysts at the consultancy PwC released a report stating that 80% of central banks around the world are exploring the possibility of issuing CBDC. PwC believes that CBDCs are more “mature” than decentralized cryptocurrencies because they can be used by public financial institutions.
On April 12, the US Depository Trust and Clearing Corporation (DTCC) announced the development of a prototype to study a central bank digital currency (CBDC).
In May, the European Central Bank (ECB) reported the possibility of developing and testing the digital euro as early as 2023. According to Fabio Panetta, a member of the ECB’s executive committee, this phase would take the regulator up to three years.
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