SWIFT Lays Out Blueprint for Central Bank Digital Currency Network After 8-Month Experiment

SWIFT's main advantage is that its existing network is already usable in over 200 countries and connects more than 11,500 banks and funds.

Advertisement
By Reuters | Updated: 5 October 2022 16:07 IST
Highlights
  • Blueprint on CBDC follows 8-month experiment
  • CBDC trial tests Distributed Ledger Technologies
  • SWIFT usable in over 200 countries
SWIFT Lays Out Blueprint for Central Bank Digital Currency Network After 8-Month Experiment

Around 90 percent of the world's central banks are now using, trialling or looking into CBDCs

Financial messaging system SWIFT has laid out its blueprint for a global central bank digital currency (CBDC) network following an 8-month experiment on different technologies and currencies.

The trial, which involved France and Germany's national central banks as well as global lenders like HSBC, Standard Chartered and UBS, looked at how CBDCs could be used internationally and even converted into fiat money if needed.

Around 90 percent of the world's central banks are now using, trialling or looking into CBDCs. Most don't want to be left behind by bitcoin and other cryptocurrencies, but are grappling with technological complexities.

SWIFT's Head of Innovation Nick Kerigan said its trial, which will be followed by more advanced testing over the next year, resembled a bicycle wheel where 14 central and commercial banks in total connected spoke-like into its main hub.

Advertisement

The idea is that once scaled-up, banks may need only one main global connection, rather than thousands if they were to set up connections with each counterpart individually.

"We believe that the number of connections needed is much fewer," Kerigan said. "Therefore, you are likely to have fewer breaks (in the chain) and you are likely to achieve greater efficiency."

Advertisement

The trial also tested different underlying CBDC technologies known as Distributed Ledger Technologies. The use of various technologies has also been raised as a potential hurdle for rapid global adoption.

There was a separate trial too carried out alongside Citi, clearing house Clearstream and Northern Trust on 'tokenised' assets — traditional assets like stocks and bonds transformed into digital tokens that can then be issued and traded in real-time.

Advertisement

Some countries such as the Bahamas and Nigeria already have CBDC's up and running. China is well advanced with real-life trials of an e-yuan, while central bank umbrella group, the Bank for International Settlements, has also been running cross-border trials.

SWIFT's main advantage though is that its existing network is already usable in over 200 countries and connects more than 11,500 banks and funds.

The Belgium-based firm has gone from being virtually unknown outside banking circles to a household name this year after it cut most of Russia's banks off from its network as part of the West's sanctions for the country's invasion of Ukraine.

Kerigan said that kind of move could also happen in a new CBDC system, but doubted whether it would stop countries joining one.

"Ultimately what most central banks are looking to do is to provide us with a CBDC for the people, the businesses and the organisations in their jurisdiction."

"So a solution that's fast and efficient and that gains access to as many other countries as possible would seem to be an attractive one."

© Thomson Reuters 2022

 


Will crypto tax hurt the industry in India? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

 

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

Affiliate links may be automatically generated - see our ethics statement for details.
 

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Swift, Standard Chartered, France, Germany
Advertisement

Related Stories

Popular Mobile Brands
  1. Know All About Apple's New Liquid Glass Design Language
  2. WWDC: Prepare for iOS 26, iPadOS 26, and the Dazzling Era of Liquid Glass
  3. Samsung Galaxy S25 Ultra Allegedly Saves Life by Stopping Shrapnel
  4. Nothing Announces 'Now or Nothing' Sale in India: Check All Offers
  5. Android 16 Update Is Coming Soon - Here's What to Expect
  6. Vodafone Idea (Vi) Launches 5G Services in Bengaluru
  7. Realme Announces Limited-Time Discounts on Realme GT 7 Series in India
  8. Latest Windows 11 Insider Preview Lets You Try the New Start Menu
  9. Motorola Edge 60 With 5,500mAh Battery Launched in India: Price, Offers
  1. NASA Slightly Raises Odds of Asteroid Hitting the Moon in 2032 After Updated JWST Data
  2. James Webb Space Telescope Captures Stunning Near-Infrared View of Sombrero Galaxy
  3. Perseverance Rover Studies Ancient Martian Rocks at Fallbreen and Forlandet Quadrangle
  4. The Prosecutor OTT Release Date: When and Where to Watch it Online?
  5. Eleven OTT Release Date Announced: Know Where to Watch This Tamil Crime Thriller
  6. Nothing Announces 'Now or Nothing’ Sale in India for Nothing and CMF-Branded Products
  7. What is Liquid Glass Interface, Apple’s New Universal Design Language for iPhone, iPad, Mac, and Other Devices
  8. Activision Says It's Working With Nintendo to Bring Call of Duty to Switch After Black Ops 7 Reveal
  9. Asus TUF Gaming F16, TUF Gaming A16, ROG Strix G16 and ROG Zephyrus G14 2025 Variants Launched in India
  10. UK Bolsters Web3 Investigations, Appoints First Crypto Intelligence Specialist to Insolvency Service
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.