The global payments network Society for Worldwide Interbank Financial Telecommunication (SWIFT) recently partnered with French consultancy Capgemini to run new experiments and test and interconnect domestic central bank digital currencies (CBDCs), taking the next step towards payments. international markets using these currencies.
“Facilitating interoperability and interconnection between different CBDCs being developed around the world will be key if we are to fully realize their potential,” said Thomas Zschach, chief innovation officer at SWIFT, quoted in a statement.
Zschach noted that the global CBDC ecosystem today is at risk of becoming fragmented, as “various central banks” are currently developing their own digital currencies based on different technologies, standards and protocols.
In its new set of experiments, SWIFT aims to take its capabilities to the next level, testing how its network can interconnect the various domestic CBDC networks around the world. SWIFT says its aim is to make cross-border payments involving CBDCs simpler and frictionless for network users.
The network recognizes that not all CBDCs will adopt the same technology, as some national platforms are being built using a centralized architecture while others are based on DLT. With that in mind, SWIFT wants to test how it can interconnect CBDC platforms at a network level, regardless of the technology they use, with existing payment systems around the world through the SWIFT platform.
Sudhir Pai, Chief Technology and Innovation Officer for Capgemini's Global Financial Services business said, "Our well-defined taxonomy has helped us to accelerate our efforts to build CBDC interlinks with SWIFT," and added, "We look forward to continuing to collaborate in building industry standards and frameworks with SWIFT”.
