network Swift is planning a new platform in the next one to two years to connect the wave of central bank digital currencies now in development to the existing finance system.
It focused on ensuring different countries’ CBDCs can all be used together even if built on different underlying technologies, or “protocols”, thereby reducing payment system fragmentation risks. It also showed they could be used in highly complex trade or foreign exchange payments and potentially be automated so to both speed up and lower the costs of the processes.
Countries such as the Bahamas, Nigeria and Jamaica already have CBDCs up and running. China is well advanced with real-life trials of an e-yuan. The European Central Bank has a digital euro under way, too, while the Bank for International Settlements, the global central bank umbrella group, is running multiple cross-border trials.
A raft of heavyweight commercial banks including HSBC, Citibank, Deutsche Bank, Société Générale, Standard Chartered and the CLS FX settlement platform all took part, too, as did at least two banks from China.