Swift, the global financial messaging cooperative, revealed that the latest round of experiments conducted within a collaborative Central Bank Digital Currency (CBDC) sandbox has shown promising results for the application of CBDCs and digital tokens.
Over the last six months, 38 global institutions participated in Swift’s CBDC sandbox, marking it as one of the most extensive CBDC experiments to date.
Swift’s CBDC sandbox is aimed at testing the interlinking solutions for CBDCs, focusing on more sophisticated use cases like digital trade, tokenised assets, FX networks, and payment systems.
Throughout the project, over 125 users engaged in more than 750 transactions, exploring the feasibility and benefits of CBDCs in various financial operations.
Swift emphasised the project’s role in demonstrating how current financial infrastructures could adapt to and incorporate these new technologies.
The experiments successfully showcased the potential of Swift’s interlinking solution to streamline trade processes, enhance liquidity in tokenized securities markets, and enable efficient foreign exchange settlement.
Specifically, in digital trade, the experiments proved the capability for interoperability among diverse digital networks, facilitating atomic trade payments. This method allows for the simultaneous completion of payments and asset transfers, potentially enabling around-the-clock automated trade flows.
In the securities domain, the project addressed the challenge of interoperability between tokenisation platforms, demonstrating Swift’s ability to link various asset and cash networks for atomic delivery versus payment.
For foreign exchange, the experiments, conducted in collaboration with CLS, revealed the potential for Swift’s solution to integrate with existing market infrastructures, thus facilitating FX netting and settlement through CBDCs.
Swift plans to expand its solution to support a wider range of emerging digital networks, including those for tokenised deposits, as the exploration of CBDCs and digital assets continues.
Tom Zschach
“Swift is a community – a convener of and for our industry – and I’m delighted that we’ve been able to facilitate these critical innovation experiments.
They show that institutions can continue to use much of their existing infrastructure alongside new, innovative technologies.”
said Tom Zschach, Chief Innovation Officer at Swift.
Featured image credit: Edited from Freepik
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- Source: https://fintechnews.sg/93617/digitalassets/swift-cbdc-sandbox/
