SWIFT Network Tests CBDCs to Facilitate Cross-Border Payments
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Answer SWIFT Network Tests CBDCs to Facilitate Cross-Border Payments
Network and global provider of secure money transfer services, SWIFT, is testing the interconnection of multiple emerging local CBDCs for cross-border transactions.
Belgium-based SWIFT, a network that enables financial institutions to connect with each other for global payments, recently announced that it has hired French IT services and consultancy firm Capgemini to test the interconnection of CBDC networks.
CBDC and Interoperability:
According For the official blogAccording to SWIFT, cross-border use of central bank digital currencies may be a blind spot for this type of digital currency since it was primarily developed to implement domestic financial policies.
Thomas Zschach, Head of Innovation at SWIFT believes that different central bank cryptocurrency systems need to work together for cross-border transactions, and that SWIFT has a role to play in this, adding:Read:Coinbase warns its users that it may keep their digital assets in the event of bankruptcy
Facilitating interoperability and interconnection between the various CBDCs being developed around the world will be critical if we are to realize their full potential.
Today, the global ecosystem of central bank digital currencies is in danger of becoming fragmented with many central banks developing their own digital currencies based on different technologies, standards, and protocols.
Nick Kerrigan, Head of Innovation at SWIFT, noted that as central bank digital currencies will increasingly be seen as a new form of fiat currency, many of these platforms will be developed that parallel the traditional payment system to integrate with traditional financial infrastructure. .
In this case, SWIFT, whose technology solutions can be accessed by more than 11,000 financial institutions in more than 200 countries, aims to enable a highly scalable and easily integrated solution for international payments via digital central bank currencies.
By collaborating with Capgemini, the publication revealed that SWIFT will focus on addressing three use cases:
CBDC to CBDC, fiat fiat currencies to CBDC, and CBDC to fiat fiat currencies.
SWIFT’s vision is going beyond digital central bank currencies, in an effort to enable interoperability between other digital assets and currencies.Read:CFTC orders crypto thief to pay $571 million in fine
SWIFT and sanctions against Russia:
SWIFT, as noted above, is the network and association for global interbank financial communications and is the largest international financial messaging system in the world.Read:Cryptocurrency investors lose millions due to scams
After the West agreed to exclude Russian banks from it, financial institutions in the region had problems staying afloat.
The goal of Russia’s expulsion from the SWIFT system was to cut off the country’s ability to liquidate assets and transfer funds through institutions that are members of the system.
However, in an effort to isolate and punish the nation, the move caused criticism from countries like Russia and China that planned to migrate to their own regimes to counter the impact of sanctions.
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