SWIFT CBDC Interlinking Solution Enters Beta Testing

SWIFT CBDC Interlinking Solution Enters Beta Testing

The Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global provider of financial payment services, has announced that its central bank digital currency (CBDC) connector has entered beta testing stages. SWIFT reported that three central banks are already testing this interlinking solution, while more than 30 financial institutions are testing its various applications in a sandbox environment.

SWIFT CBDC Connector Being Tested by 3 Central Banks

The Society for Worldwide Interbank Financial Telecommunication (SWIFT), provider of the de-facto standard for cross-border financial settlements, has announced that three central banks are already testing its central bank digital currency (CBDC) interlinking solution.

The connector, developed after the experiences that SWIFT accumulated during the first CBDC sandbox, completed earlier this year, aims to provide an effective solution for interoperability between already-existent fiat currencies and these new tokens. During this sandbox, almost 5,000 transactions were simulated between two blockchain systems (Quorum and Corda) and existent Real Time Gross Settlements (RTGS) fiat systems.

The Hong Kong Monetary Authority (HKMA) and the National Bank of Kazakhstan are among the three institutions that have already integrated this solution within their financial infrastructure, allowing them to test its functions and performance directly.

Connecting Digital Islands

Besides this, SWIFT announced the launch of a second CBDC sandbox, in which more than 30 financial institutions will experiment with different use cases and applications for interconnected currencies. The Reserve Bank of Australia, Deutsche Bundesbank, HKMA, Bank of Thailand, and CLS are among the institutions developing various implementations for CBDC technology.

As expressed in the results report of the first CBDC sandbox, titled “Connecting Digital Islands,” SWIFT’s purpose is to avoid a situation where liquidity is kept siloed in each one of these networks without means for interacting with other systems.

Tom Zschach, Chief Innovation Officer at Swift, expanded on this idea. He stated:

Our focus is on interoperability – ensuring that new digital currencies can seamlessly coexist with each other and with today’s fiat-based currencies and payment systems.

Zschach detailed that with this new sandbox, SWIFT expects to refine its solution to ensure its effectiveness at a scale.

19 of the 20 nations of the Group of Twenty (G20) are already in advanced states of CBDC research, while nine are already running CBDC pilots. This is part of the reason SWIFT is focusing on developing these solutions to allow the interactions and scaling of CBDCs “if and when they are deployed into the financial ecosystem.”

What do you think about SWIFT’s CBDC connector and the launch of its new CBDC sandbox? Tell us in the comments section below.



from Bitcoin News https://ift.tt/L5UWTxH
https://ift.tt/yE2rgzH

Post a Comment

0 Comments