SWIFT Announces Successful Trials of Payments with digital Currencies of CBDC Bank

03/09/2023

1 minute read

2023.03.09 13:10

By Ray Johnson

Budrigannews.com – The financial institution’s pilot test of linking various central bank digital currencies (CBDCs) yielded positive results, according to a statement released on March 9 by the bank messaging platform Society for Worldwide Interbank Financial Telecommunications, or SWIFT.

SWIFT simulated nearly 5,000 transactions between two distinct blockchain networks and existing fiat payment systems over a 12-week testing period. The Royal Bank of Canada, Banque de France, Société Générale, BNP Paribas, Monetary Authority of Singapore, HSBC, Deutsche Bundesbank, NatWest, and a number of other financial institutions all participated in the study. As told by Quick:

“Overall, the sandbox testing revealed that Swift’s experimental interlinking solution can satisfy the requirements of commercial and central banks for the interoperability of CBDCs, ensuring that CBDCs can be utilized successfully in cross-border payments,” the findings read.

Additionally, SWIFT stated that there was a “strong degree of alignment” among participants regarding the likely future functions of CBDCs. SWIFT intends to carry out a second phase of its CBDC sandbox and refine its “CBDC interlinking solution into a beta version for payments with enhanced atomicity” as the next steps.

SWIFT anticipates that 24% of central banks will develop a CBDC solution within the next few years. CBDC use cases are currently being investigated by over 110 central banks worldwide. HSBC’s global head of domestic and emerging payments, Lewis Sun, made the following remarks:

“The ability of CBDCs to provide real-time cross-border payments requires interoperability. As a wider variety of technologies and standards are being tested, the risk of fragmentation is growing alongside interest in CBDCs.”