SWIFT Successfully Concludes CBDC Trial and Plans to Run a Second Phase of Tests

With over 100 countries working on central bank digital currencies (CBDCs), the Society for Worldwide Interbank Financial Telecommunications (SWIFT) has captured the attention of the crypto and fiat world after revealing it is moving ahead with its CBDC program.

Following positive outcomes from its initial tests, SWIFT will move ahead with its CBDC tests. It is worth noting that with its pilots, SWIFT is trying to create a unified cross-border system for central bank digital currencies.

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Despite each country working on the same concept, each of them seeks to create a system based on local standards and technologies. Additionally, many are working on CBDC projects focused on domestic use without serious consideration for cross-border interoperability.

SWIFT believes that it could lead to fragmentation and reduce interoperability of the global financial system. Its solution would ensure CBDCs can seamlessly move between fiat-based systems and distributed ledgers.

During the first phase of its test system, SWIFT simulated close to 5000 transactions across different distributed ledgers and fiat systems.

Major global financial institutions participated in the pilot, including the central banks of France and Canada, NatWest, HSBC, the Monetary Authority of Singapore, and BNP Paribas. The transactions were simulated over 12 weeks.

Based on the statement shared by SWIFT:

Overall, the results of the sandbox testing found that Swift’s experimental interlinking solution can meet the needs of central and commercial banks for CBDCs interoperability, ensuring CBDCs can be successfully used in cross-border payments.

The second phase of the SWIFT CBDC sandbox will focus on developing its "CBDC interlinking solution into a beta version for payments with enhanced atomicity."

The OMFIF Digital Monetary Institute has estimated that almost 24% of central banks globally will launch a CBDC platform in the next few years.