Banking messaging platform the Society for Worldwide Interbank Financial Telecommunication (SWIFT) revealed that the financial institution has achieved positive results in its pilot tests linking different central bank digital currencies (CBDCs), according to a March 9 statement.
During the 12-week test period, SWIFT simulated almost 5,000 transactions between two different blockchain networks and an existing fiat payment system. More than 18 financial institutions around the world participated in the study, including Royal Bank of Canada, Banque de France, Société Générale, BNP Paribas, Monetary Authority of Singapore, HSBC, Deutsche Bundesbank, NatWest and others. As SWIFT puts it: "Overall, the results of the sandbox test show that Swift's experimental interconnection solution can meet the needs of central banks and commercial banks for CBDC interoperability, ensuring that CBDC can be successfully used for cross-border payments."
Additionally, SWIFT said there is a "high level of agreement" among participants on how a CBDC might work in the future. For next steps, SWIFT plans to run the second phase of its CBDC sandbox and develop its “CBDC interconnection solution as a beta for payments with enhanced atomicity.”
In the next few years, the OMFIF Digital Currency Institute expects 24% of central banks to develop CBDC solutions. More than 110 central banks around the world are currently researching CBDC use cases. Lewis Sun, Global Head of Domestic and Emerging Payments at HSBC commented: “Interoperability is key to realizing the potential of CBDCs to provide real-time cross-border payments. While interest in CBDCs is growing, the risk of fragmentation increases as more technologies and standards are being trialed.”
