SWIFT aims for a unified platform connecting numerous CBDCs by 2026

SWIFT is planning to launch a new platform in the next one to two years that will connect central bank digital currencies (CBDCs) to the existing financial system. This move comes as approximately 90% of the world’s central banks are exploring digital currency options to keep up with advancements in crypto like Bitcoin. The platform aims to integrate CBDCs with the financial system while dealing with technological complexities.

SWIFT’s head of innovation, Nick Kerigan, revealed that the organization recently concluded a six-month trial involving nearly 40 central banks, commercial banks, and settlement platforms. This trial marked one of the largest global collaborations on CBDCs and tokenized assets to date. The trial successfully interconnected multiple asset and cash networks, enabling atomic delivery versus payment across platforms. Central banks from countries like Germany, France, and Australia participated in the pilot.

SWIFT’s chief innovation officer, Tom Zschach, emphasized the organization’s ambition to address the industry’s fragmentation challenge. He highlighted the significance of this milestone achievement in integrating CBDCs into the existing financial system. However, not all countries are rushing to develop their digital currencies. Concerns about technological and regulatory hurdles remain, as highlighted by Sweden’s Riksbank, which stressed the need for extensive development to ensure secure offline payments with e-kronas.

Federal Reserve Chair Jerome Powell also recently testified before the Senate Banking Committee, indicating that the Federal Reserve is not yet ready to recommend or adopt a CBDC. He reassured the public that there is no imminent rollout of a central bank digital currency.