SWIFT, the interbank payments protocol and messaging system, has said that it would integrate several current central bank digital currency (CBDC) protocols. The firm has partnered with Capgemini, a digital services provider, to do a series of experiments to assure that the new CBDCs can make cross-border transactions and remittance.
SWIFT aims to modernise connection systems
SWIFT is trying to make its services accessible to the upcoming group of CBDC currencies. The volunteer cooperation has claimed that it is already developing decentralised platforms to ensure that users of these currencies may make remittances and cross-border transfers in the future.
SWIFT believes that the interconnection of this new type of currencies will be vital to the project’s success. While there are already few CBDCs in existence, according to Bank of International Settlements data, nine out of ten central banks are already researching the prospects of CBDCs, indicating that there is interest in the issue.
SWIFT’s Head of Innovation, Nick Kerigan, emphasised the significance of this interconnectedness, noting:
Different systems and different CBDCs will need to be able to efficiently work together, or it will hamper the ability of businesses and consumers to make frictionless cross-border payments using CBDCs.
CBDC Experiments
SWIFT is conducting experiments in partnership with Capgemini, a digital services business, to test the ability of these crypto currencies to be swapped among different systems that are not built to perform such functions.
While the internal workings of the system in place have not been made publicly available, SWIFT clarifies that a part of the existing payments infrastructure, such as existing bank messaging standards and identification models, ISO 20022, and SWIFT’s private key architecture, is being reused.
So far, trials using several decentralised ledger systems, such as Corda and Quorum, indicate that the proposed goals may be feasible. This would suggest that CBDCs might coexist with conventional fiat money via SWIFT systems during the transition to total digitization.
SWIFT also suggested the possibility of adding various types of crypto assets into its network as they become more regulated worldwide.
