Three Central Banks Conducting CBDC Pilots, Reports SWIFT
According to an notice from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), 3 central banks have initiated pilots for monetaryย authority digitalย currencies (CBDCs). SWIFT states that it is now progressing with CBDC interoperability and that the Hong Kong Centralย Bank (HKMA) and the National Bank of Kazakhstan are asย ofย now integrating the new solution into their infrastructure for direct testing. The third monetaryย authority involved in the pilot remains unnamed.
The focus of SWIFTโs work is on ensuring interoperability between different CBDCs as well as with existing fiat currencies and payment systems. With approximately 130 countries actively exploring CBDC technology, SWIFT acknowledges theย capacity for fragmentation issues in the future. Therefore, developing interoperability solutions is a top priority for the organization.
SWIFTโs โConnectorโ Technology Enables Seamless Transactions
SWIFT outlines that its new โconnectorโ technology has already facilitated seamless transactions between different blockchain-based CBDC systems built on diverse frameworks. The organization has been working on CBDCs for over 18 months, conducting experiments and sandbox testing. During the initial phase, nearly 5,000 simulated transactions tookย place between two different blockchain networks and existing fiat-based payment systems. Participants from central and commercial banks pointedย outย that the connector allowed for smooth exchange of CBDCs, even when built on different platforms.
Hot Take: Ensuring Interoperability for CBDCs is Crucial for Worldwide Adoption
As central banks aroundย theย globe continue to explore CBDC technology, ensuring interoperability between different digitalย currencies becomes essential for worldwide adoption. SWIFTโs efforts to develop a solution that allows seamless coexistence between CBDCs and traditional payment systems are commendable. By addressing probable fragmentation issues, SWIFT intendsย to create a unified and efficient financial ecologicalย system. The successful completion of these CBDC pilots by the 3 central banks will be a wholeย lotย of step forward in the evolution of digitalย currencies and their integration into the worldwide financial landscape.
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