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SWIFT’s Plan for Central Bank Digital Currencies
SWIFT, the global messaging network used by various financial entities, is gearing up to launch a new platform that will facilitate the connection of central bank digital currencies (CBDCs) within the next one to two years. This initiative was revealed by Nick Kerigan, the head of innovation at SWIFT.
Global CBDC Developments
Central banks worldwide are actively exploring the development of their own CBDCs, adding a geopolitical dimension to the race for digital currency supremacy. Countries like China, the Bahamas, Nigeria, Jamaica, Sweden, and the European Central Bank are all making significant strides in this area.
SWIFT’s Platform Progress
Kerigan mentioned that SWIFT is in the process of productizing the new platform, with a target timeline of 12-24 months. The transition from experimental to operational stages signifies a significant step towards realizing this ambitious project.
In a recent trial conducted by SWIFT, a diverse group comprising central banks, commercial banks, and settlement platforms collaborated for six months to ensure interoperability among various national CBDCs, even if they are built on different technologies. This interoperability aims to mitigate risks associated with payment system fragmentation.
Bank of International Settlements (BIS) Initiatives
The Bank of International Settlements (BIS) is also actively involved in CBDC projects. The ‘Aurum’ project, focusing on privacy in retail CBDC payments, is one of the key initiatives under the BIS Innovation Hub work programme for 2024. Additionally, Project mBridge aims to establish a common platform for wholesale cross-border CBDC payments.
In collaboration with central banks from France, Singapore, and Switzerland, BIS successfully tested cross-border settlement for wholesale-CBDCs through Project Mariana, showcasing seamless CBDC transfers across different networks.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
