The Society for Worldwide Interbank Financial Telecommunication (SWIFT) conducted an 8-month trial on different technologies and central bank digital currencies (CBDCs).
It determined that such monetary products could take part in the global financial ecosystem and assist cross-border payments.
Earlier this year, SWIFT launched a program whose purpose was to link different CBDCs systems and thus ease the difficulty in cross-border settlements. Back then, Chief Innovation Officer Thomas Zschach claimed that those products had been a “blind spot” and, used together, they could enable “frictionless” transactions between different countries.
A recent press release revealed that SWIFT’s trial has ended, proving that CBDCs are able to facilitate international payments and covert into fiat if needed.
It is worth noting that major players in the financial field, such as the central banks of France and Germany, HSBC, Standard Chartered, and UBS, also participated in the experiment. SWIFT determined that the new CBDC solution can assist over 200 nations and territories worldwide. 14 central and commercial banks have already incorporated it into their infrastructure.
“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.
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.” – said Zschach.
Used by over 11,000 institutions and 4 billion accounts across 200 nations, SWIFT is by far the biggest financial messaging system. Several months ago, it cut out Russia’s ability to liquidate assets and transfer funds on its network due to the military conflict that the country started in Ukraine.
Last month, the Belgium-based entity partnered with the fintech company Symbiont Inc. to test the use cases of blockchain technology. Leading monetary institutions such as Citigroup, Vanguard, and Northern Trust also participated in the project.
Zschach raised hopes that crypto’s underlying technology could help SWIFT “harmonize data from multiple sources of a corporate action event.”
Featured Image Courtesy of JapanTimes