SWIFT, the global messaging network used by banks, service providers, clearinghouses, corporate business houses, brokers, is planning to launch a new platform to connect central bank digital currencies (CBDCs) in the next one to two years, according to a Reuters report citing the firm’s head of innovation, Nick Kerigan.
Central banks around the world are tinkering with their own CBDCs and the race for who will launch a digital currency has a geopolitical component to it.
China has a digital yuan in the works and has been trialing the currency for many years. The Bahamas, Nigeria and Jamaica already have CBDCs. Sweden’s Riksbank recently released its final report on its CBDC, the e-Krona, and the European Central Bank is developing the digital Euro too.
SWIFT’s Trials and Roadmap to Launch New Platform
“We are looking at a roadmap to productize (launch as a product) in the next 12-24 months,” Kerigan told the newswire in an interview. “It’s moving out of experimental stage towards something that is becoming a reality,” added Kerigan.
Kerigan explained in SWIFT’s latest platform trial it took six months and involved a 38-member group of central banks, commercial banks and settlement platforms, all collaborating on national digital currencies.
The trial was focused on making sure that all the different countries’ CBDCs can all be used together even if built on different underlying technologies and this in turn would reduce payment system fragmentation risks.
The timeframe set out by SWIFT could change if CBDC launches around the world are delayed but for now the global payments firm is developing a new platform.
Bank of International Settlements CBDC Plans
In January the Bank of International Settlements (BIS) unveiled that its CBDC project is entering a new phase this year. The BIS’s ‘Aurum’ project is exploring “the privacy of payments in retail CBDCs.” — BIS said this is one of the first six projects for 2024 being developed under its Innovation Hub work programme.
The BIS is also working on Project mBridge, a multi-CBDC common platform for wholesale cross-border payments. In September, BIS and central banks of France, Singapore, and Switzerland announced a successful testing of cross-border settlement for wholesale-CBDCs. Project Mariana, tested and demonstrated the frictionless transfer of CBDCs across the different networks.
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