SWIFT plans to create a new platform to connect CBDCs to the financial system

La Hulpe -  Belgium - Eco – Fady Labib : In an important development for the global banking sector, SWIFT, the international banking communications network, has announced plans to launch a new platform within the next 12 to 24 months ...

This platform aims to integrate emerging central bank digital currencies (CBDCs) with the existing financial system. 

This initiative confirms the rapidly growing interest in digital currencies among the world's central banks, which seek to adapt to the digital age.

 

The upcoming SWIFT platform will likely play a crucial role in the thriving CBDC ecosystem.

 This step could strengthen SWIFT's pivotal position in global finance, especially since about 90% of the world's central banks are currently exploring or developing digital versions of their national currencies. 

These institutions are motivated by a desire to keep pace with the cryptocurrency revolution while facing the technological challenges that come with it.

About SWIFT :

What is SWIFT ? SWIFT (Society for Worldwide Interbank Financial Telecommunication)

 is a global financial messaging system that enables the transfer of funds between banks and financial institutions around the world. It provides a standardized format for securely transmitting financial transactions and information.

Security and Reliability

 SWIFT is designed to provide a secure and reliable way to transfer financial messages, with strict protocols and standards to ensure the integrity and confidentiality of the data. It is widely used by banks and financial institutions around the world.

Global Reach and Adoption

 SWIFT has a global network of over 11,000 participating financial institutions in more than 200 countries and territories. It processes an average of 42 million messages per day, making it the backbone of international financial transactions.

The trial also demonstrated the ability of central bank digital currencies to simplify complex trade and foreign exchange transactions, and presented the potential to automate these processes to enhance efficiency and reduce costs.

 The participants considered the experiment a success, stressing that banks can benefit from their existing infrastructure within the new central banking framework.

 Kerrigan's statements to Reuters revealed an ambitious timetable for producing the new platform, and moving from the experimental stages to a tangible reality within the next year or two.

 

This development comes as several countries, including the Bahamas, Nigeria and Jamaica, have already launched their own central bank digital currencies.

 On the other hand, major economies such as China are moving forward with real-world trials, and the European Central Bank is exploring a digital euro.

 The Bank for International Settlements is also experimenting with cross-border central bank digital currencies, highlighting the global momentum towards digital currencies.

 

The spotlight on SWIFT has intensified since 2022 when it disconnected several Russian banks from its network as part of Western sanctions against Russia's invasion of Ukraine. 

The move demonstrated the significant impact of SWIFT on global financial transactions and its potential role in enforcing international sanctions through the new CBDC system.

 

The success of the initiative could significantly enhance the scalability and efficiency of global financial transactions, in line with Boston Consulting Group's expectations. 

According to the group, nearly $16 trillion in assets could be tokenized by 2030, underscoring the huge potential for integrating digital assets into the traditional financial system through the upcoming SWIFT platform.

according to : Digital Pound Foundation

            

About the Digital Pound Foundation (DPF)

The Digital Pound Foundation is an independent organization incorporated in June 2021 to work with various stakeholders and participants towards the implementation of a well-designed digital Pound. The DPF aims to support the development of a healthy and diverse ecosystem for the digital Pound.

 

 Purpose of the Foundation

 The Digital Pound Foundation was established to provide an independent forum for supporting the implementation of a well-designed digital Pound by the Bank of England. The DPF collaborates with stakeholders and participants to ensure the digital Pound meets the needs of the UK economy and financial system.

 

 Involvement of the Bank of England

 The Bank of England is exploring the potential introduction of a UK central bank digital currency (CBDC) called the digital Pound. The Digital Pound Foundation works closely with the Bank of England and other key stakeholders to provide input and support for the design and implementation of the digital Pound.