The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, the Belgian monetary messaging network utilized by banks in international cash transfers, introduced Thursday that it’s teaming up with French IT firm Capgemini to conduct experiments with cross-border central financial institution digital forex (CBDC) funds. This is SWIFT’s second analysis mission on CBDC.
SWIFT and Capgemini are testing methods to hyperlink a number of CBDC networks, in addition to CBDC and conventional forex networks, as a proof of idea. The majority of central banks worldwide are engaged on creating CBDCs, “with numerous central banks developing their own digital currencies based on different technologies, standards and protocols,” Thomas Zschach, SWIFT chief innovation officer, stated in an announcement.
According to the firm’s assertion, it’s growing a gateway for home CBDC networks to intercept, translate and ahead them to the SWIFT platform for onward transmission. The system will use present SWIFT requirements, authentication fashions and infrastructure. SWIFT connects over 11,000 monetary establishments in over 200 international locations.
SWIFT’s new alliance is a continuation of the efforts begun final yr with American skilled providers firm Accenture. That collaboration succeeded in making a cross-border transaction between a CBDC network and “an established real-time gross settlement (RTGS) system.”
“If the experiments are successful, it will demonstrate that SWIFT has the capability and technical components to interlink different networks,”
SWIFT head of innovation Nick Kerigan stated. “This would help solve a huge technology and industry challenge facing CBDCs. And it could enable us to help central banks make their own CBDC networks cross-border payment ready.”
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SWIFT processed 42 million messages a day final yr, however transactions on the network can take a number of days to full. It is striving to preserve its relevance in the international financial order, particularly in regard to CBDCs. Many builders foresee CBDCs interacting outdoors the conventional network, probably with the support of Ripple’s (XRP).