SWIFT has been testing an interoperability solution to enable domestic central bank digital currencies (CBDCs) to be used for cross border payments. It ran 12 weeks of successful sandbox simulations with the central banks of France, Germany and Singapore and 15 commercial banks and plans to advance to a beta phase.
One of the risks with digital currencies is fragmentation, as each digital currency network is potentially an island. Hence interoperability is crucial between conventional systems and digital currencies and particularly for cross border payments.
Much like SWIFT’s role in conventional payments, SWIFT provides a hub for the interlinking solution in which messages are sent between parties. CBDCs never leave their domestic networks.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
