SWIFT Introduce Blueprint for CBDC Cross-Border Usage

After eight months of research and experiments, the financial networking system Society for Worldwide Interbank Financial Telecommunication (SWIFT) has put together a blueprint for a global Central Bank Digital Currency (CBDC) network. 

Based on the results from the experiments, it has been discovered that CBDCs and tokenized assets can seamlessly move on existing financial ecosystems.

The results from two separate experiments which involved the central banks of France and Germany as well as global lenders like British multinational universal bank HSBC, Standard Chartered, and UBS provided a solution to the challenge which has embattled the adoption of CBDC across many countries. 

Many nations of the world are interested in developing and using their CBDC in tandem with moving trends in the financial ecosystem. Most of them wish to move at the pace of Bitcoin (BTC), Ethereum (ETH), and other cryptocurrencies but were challenged by the CBDC technological complexities such as the interoperability in cross-border transactions. 

SWIFT Blueprint Bridges CBDC Interoperability

The SWIFT blueprint with its core capabilities has created a bridge between different distributed ledger technology (DLT) networks and existing payment systems, allowing digital currencies and assets to flow smoothly alongside, and interact with, their traditional counterparts. 

Conquering the issue of interoperability, once the blueprint is implemented, banks will only need a single global connection for their CBDCs to interact with others in over 200 countries and territories around the world and also interact with traditional fiat currencies. The CBDCs will be deployed to expedite trade and international investments across the globe without hindrance.

Tom Zschach, SWIFT’s Chief Innovation Officer said “Digital currencies and tokens have huge potential to shape the way we will all pay and invest in the future. But that potential can only be unleashed if the different approaches that are being explored have the ability to connect and work together.”

He continued “We see inclusivity and interoperability as central pillars of the financial ecosystem, and our innovation is a major step towards unlocking the potential of the digital future. For CBDCs, our solution will enable central banks to connect their own networks simply and directly to all the other payment systems in the world through a single gateway, ensuring the instant and smooth flow of cross-border payments.”

The European Central Bank (ECB) recently declared CBDCs as the winner over rivals, including banking, BTC, and stablecoins, among others when it comes to cross-border payments.

All things considered, advanced testing to speed up the deployment of these findings will be carried out with 14 central and commercial banks like Banque de France, the Deutsche Bundesbank, HSBC, Intesa Sanpaolo, NatWest, SMBC, Standard Chartered, UBS, and Wells Fargo.