By 2026, SWIFT plans to establish a unified platform connecting various CBDCs.
SWIFT, the global financial messaging network, has announced plans to launch a new platform within the next two years. The platform aims to connect central bank digital currencies (CBDCs) to the existing finance system, in order to support and enhance the CBDC ecosystem. This move comes as approximately 90% of the world’s central banks are exploring digital currency options, as they seek to keep up with advancements in cryptocurrencies like Bitcoin.
The head of innovation at SWIFT, Nick Kerigan, revealed that the organization recently completed a six-month trial involving almost 40 central banks, commercial banks, and settlement platforms. This trial, which is one of the largest global collaborations on CBDCs and tokenized assets to date, aimed to interlink multiple asset and cash networks. It successfully facilitated atomic delivery versus payment across various platforms, with the participation of central banks from countries such as Germany, France, and Australia.
SWIFT’s chief innovation officer, Tom Zschach, emphasized the organization’s determination to address the challenges of fragmentation within the industry. He acknowledged the significance of this milestone achievement in integrating CBDCs into the existing financial system.
However, not all countries are rushing to develop their own digital currencies. Concerns about technological and regulatory hurdles remain, as highlighted by Sweden’s Riksbank, which emphasized the need for extensive technical and regulatory development to ensure secure offline payments with e-kronas.
Furthermore, Federal Reserve Chair Jerome Powell recently testified before the Senate Banking Committee, indicating that the Federal Reserve is not yet prepared to recommend or adopt a CBDC. He reassured the public that there are no immediate plans for the rollout of a central bank digital currency.
In conclusion, SWIFT’s upcoming platform reflects the growing interest and efforts of central banks worldwide to explore and integrate CBDCs into the existing financial system. While there are challenges and varying levels of readiness among countries, the development of CBDCs continues to progress, with SWIFT at the forefront of this important initiative.
