SWIFT has revealed its plans to utilize the blockchain to link Central Bank Digital Currency (CBDC) payments across different nations. On Thursday, the tech and payment platform announced this on its official website and Twitter.
The telecom giant will collaborate with Capgemini to make this happen. SWIFT is a global corporation that facilitates cross-border payments, while Capgemini is famous for IT consulting. Both parties will conduct experiments to test the feasibility of interoperable CBDCs.
Sometime last year, SWIFT tested the interoperability of two different central bank digital currencies that operated on different systems. The experiment was successful, and the company is now set to take the next step in developing better payment systems.
SWIFT will effectively utilize its existing payment infrastructures like the ISO 20022 and its private key feature to create a linkage for CBDCs. Also, the experiments carried out have been done with decentralized ledger platforms.
CBDCs on the Rise
Since 2021, more countries have experimented with CBDCs. A recent report from BIS indicates that 9 out of 10 of the leading economic nations in the world are exploring this new form of digital money. Notably, Nigeria and The Bahamas have launched their CBDCs. Although, Nigeria’s digital currency has failed to gain adoption due to inconsistencies from the Central Bank.
Commenting on the interoperability of these digital currencies, the CIO at SWIFT said:
“Facilitating interoperability and interlinking between different CBDCs being developed around the world will be critical if we are to realize their potential fully.”
Thomas Zschach also emphasized that the development of different digital currencies by the central bank of different nations may lead to a divided economic ecosystem if not addressed on time. Different CBDCs will need to work together to enable seamless payments across other countries.
So far, the experiment seems to be going well, with no significant obstacles to the interoperability plans. CBDC enthusiasts worldwide are looking forward to the proposed development in the coming weeks.