Markets News Report
March 26, 2024

SWIFT to Debut Platform Linking CBDCs with Global Financial Infrastructure in Coming Years

In Brief

SWIFT creates new platform aimed at enabling the integration of CBDCs from multiple global banks into the existing financial infrastructure. 

SWIFT to Debut Platform Linking CBDCs with Global Financial Infrastructure in Coming Years

Global bank messaging network SWIFT is in the process of creating a new platform aimed at enabling the integration of central bank digital currencies (CBDCs) from multiple global banks into the existing financial infrastructure. The new platform is expected to be introduced within the next 12-24 months.

The announcement follows SWIFT’s successful completion of its latest test involving 38 central banks, commercial banks, and settlement platforms. The test focused on assessing interoperability among various CBDCs. 

The trial involved central banks from Germany, France, Australia, Singapore, the Czech Republic, and Thailand, alongside several others. Notable commercial banks like HSBC, Citibank, Deutsche Bank, Societe Generale, Standard Chartered, and at least two banks from China participated in the trial.

The trial also explored the feasibility of utilizing CBDCs for complex trade or foreign exchange payments and automating transactions to enhance efficiency and decrease expenses. The positive outcomes have led SWIFT to contemplate transitioning the new platform from experimental stages to reality. 

The new initiative marks a significant advancement for the evolving CBDC ecosystem, considering SWIFT’s crucial role in global banking operations. With approximately 90% of the world’s central banks investigating digital currency alternatives, there is a concerted effort to keep pace with the progress made by cryptocurrencies, including Bitcoin.

SWIFT’s extensive network links over 11,500 banks and financial institutions spanning more than 200 countries, enabling the transfer of trillions of dollars daily. The proposed platform seeks to establish a unified global hub for digital asset transactions to enhance scalability and efficiency within the banking sector.

Global CBDC Exploration Intensifies as Nations Engage in Development

Nations representing over 95 percent of global GDP are now in the process of exploring CBDCs. Although most countries are still several years away from implementation, central banks in Asia, Africa, and the Caribbean have taken early steps in this direction.

For instance, countries like the Jamaica, Nigeria, and Bahamas have already launched operational CBDCs. Meanwhile, China is conducting advanced real-world trials of its digital currency, the e-yuan. The European Central Bank is also developing a digital euro, and the Bank for International Settlements (BIS) is conducting several cross-border trials involving CBDCs.

Recently, the Hong Kong Monetary Authority (HKMA) has commenced the second phase of its central bank digital currency (CBDC) pilot, the e-HKD. Building upon the findings from the initial phase, the bank aims to further investigate the potential applications of a digital iteration of the Hong Kong dollar.

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About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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