SWIFT to test Central Bank Digital Currencies for international payments

The SWIFT messaging network jointly with French consulting company Capgemini began testing cross-border central bank digital currency (CBDC) payments.

More and more central banks around the world initiate a process of developing their own digital currencies. Some of them already use CBDCs.

According to Thomas Zschach, SWIFT’s chief innovation officer, the CBDC global ecosystem may become fragmented due to the fact that central banks create their digital currencies based on different technologies. His colleague Nick Kerrigan believes that if this situation is left unaddressed, then in the future it will lead to interaction problems between different CBDCs.

SWIFT is currently working on the developing a gateway that will intercept, translate, and send CBDC to SWIFT for further transfer to another digital currency network or payment system.

Zschach noted that ensuring the compatibility and interconnection between CBDCs developed by various banks is crucial for the full realization of their opportunities.

SWIFT’s representatives noted that a successful test will prove that the system has all the necessary technologies to connect various networks. This means that SWIFT’s specialists will be able to help central banks around the world configure their networks for cross-border transactions.

It was reported that SWIFT and Capgemini are well advanced in testing. Its results will be made publicly available soon. SWIFT also plans to explore interaction between tokenised assets market participants.

Earlier it was reported that the European Central Bank intends to start the development and testing of a digital euro.