SWIFT Plans To Enable Cross-border Payments As It Tests CBDC Interoperability
Swift, the prominent worldwide platform for financial messaging, is ready to test the CBDC (Central Bank Digital Currency) by interconnecting diverse networks for the execution of cross-border payments. Apart from presently connecting financial organizations across the globe to interact as well as carry out financial payments, the platform has interacted with Capgemini (a consulting company) and information technology-related service providers for the development of the project.
The latest move by SWIFT
A formal blog post that got published recently brings to the front that CBDCs’ utilization for payment solutions across borders may have been a dead zone for such a digital currency type since the main attention had been given to resolving problems according to the local policies.
Nonetheless, SWIFT’s Chief Innovation Officer, Thomas Zchach, stated that the exclusive diverse CBDC networks ought to operate in collaboration to provide smooth transactions between the borders, with a significant role being played on the behalf of SWIFT. He added that providing the facility of interlinking as well as interoperability among diverse CBDCs, that are being developed throughout the globe, will be of much importance as the venue is completely comprehending its potential.
At the moment, he elaborated, there are some hazards posed to the worldwide ecosystem of CBDC as well as in the way of the central banks that are moving on this track while utilizing diverse technologies and abiding by several protocols and standards. In the same vein, SWIFT’s Head of Innovation, Nick Kerigan, disclosed that at the time when the CBDC would be seen as fiat currency’s exclusive type, many such programs will commence progressing with having a connection with the conventional structure of finance.
SWIFT pursues solutions in CBDC partnerships
Along with this, the experiments at the chief feature thereof take into account the implementation of a gateway on the digital currency network’s central bank, as noted in the formal blog post. The responsibility of the gateway would be to intercept the cross-border transfers made through the respective network, interpret them as well as direct them to the venue of SWIFT for the transfer to some other network of CBDC.
Referring to the partnership with Capgemini, it was mentioned by the post that the well-known venue would direct its focus toward the deployment of the use cases dealing with the conversion between CBDCs, from fiat currency to CBDC, and vice versa.
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