Swift global banking communications system powers central banks’ global networks of digital currencies. For eight months, the interaction of different currencies with different technologies was tested to develop a blueprint for a global network for CBDC, explains Swift innovation manager Nick Kerigan.
The Bundesbank and the Banque de France as well as the major banks HSBC, Standard Chartered and UBS took part in the experiment. For example, research was conducted into how digital central bank money can be used internationally and converted into traditional currencies.
The Society for Worldwide Interbank Financial Telecommunication (Swift) is responsible for the standardized transmission of financial transfer messages and holds an important key position in the global financial system. About 11,500 financial institutions in more than 200 countries are connected to its communications network.
Almost all central banks around the world are considering adopting digital versions of their currencies. They are also responding to the threat of competition from cyber currencies from international technology groups and the rise of cryptocurrencies such as Bitcoin and Ethereum. In 2020, the island nation of Bahamas became the first country in the world to officially introduce a digital version of its currency, the “Sand Dollar”.
Of the major countries, China has already shot up in testing its e-yuan. The European Central Bank has launched a two-year investigation and wants to decide in October 2023 whether it gives the green light to the digital euro project.
According to Kerigan, the test run will be followed by more advanced testing next year. In this first experiment, several technologies were also tested, such as Distributed Ledger Technology (DLT), on which Bitcoin & Co are based.
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.