- Global bank messaging system SWIFT is currently connected to tens of thousands of institutions across the world.
- The team has successfully completed a six-month-long experiment that tested whether infrastructure was viable to release a central-backed digital currency and corresponding platform.
- The technology has the potential to vastly improve international transaction speeds and costs across banks.
- The platform is also scalable to other digital assets, such as tokenised stocks, bonds and more.
The wave of digital currencies can’t be stopped. Although the United States has explicitly stated they aren’t interested in a central bank digital currency (CBDC) anytime soon, the same cannot be said for other nations around the world.
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As the European Central Bank works on a digital Euro, and Australia moves toward a tokenised AUD, financial goliaths Swift has officially joined the party.
Implementation of the New System Will be…Swift…
SWIFT is an international messaging system that lets international banks interact with one another in a matter of seconds. Simply put, it’s a network that facilitates bank transfers across databases.
After lengthy and exhaustive research – which involved 38 industry partners across the globe – Swift found that employing distributed ledger technology and a CDBC could:
…simplify and speed up trade flows, unlock growth in tokenised securities markets, and enable efficient FX settlement…Swift’s solution has already been shown to to enable cross-border transfers and connect CBDCs on different networks with each other, as well as with fiat currencies.
SWIFTSWIFT joins close to 90% of the world’s banks that are exploring their own CDBC, a huge turnaround from the anti-blockchain sentiment shared by most institutions in the past. The SWIFT team plans to release a new platform for managing, distributing and processing tokenised assets within the next 12-24 months.
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The new system won’t go online straight away – there are likely to be bugs and fine-tuning that need taking care of. Though this seems a long time in the future, in reality, SWIFT is likely to be one of the first financial institutions to officially join the CDBC arms race, alongside banks in the Bahamas, Jamaica and Nigeria that have already tokenised national currencies.
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