Banks see “clear potential and value” in Swift’s experimental CBDC connector after sandbox collaboration

An announcement from SWIFT on its experimental solution for Central Banks Digital Currencies and how to move CBDC-to-CBDC and CBDC-to-fiat seamlessly, in international transactions, on existing financial infrastructure across more than 200 countries. Swift is looking at developing a financial ecosystem in which digital and traditional currencies co-exist. Interoperability is a key strategic focus for Swift, and a key challenge for the financial industry as digital currencies develop.

18 central and commercial banks which took part in the initiative are encouraging continued development, following experiments that involved nearly 5,000 CBDC-to-CBDC and CBDC-to-fiat simulations over a 12-week period. Central and commercial bank participants expressed strong support for the solution’s continued development, noting that it enabled seamless exchange of CBDCs, even those built on different platforms.

Swift will now build a beta version of the solution for payments that can be tested further by central banks. It will also explore additional use cases in securities settlement and trade finance; a second phase of sandbox testing will be held, in which the Swift community can collaborate further with a focus on new use cases, including in securities settlement (such as cross-asset exchange), trade finance, and conditional payments.

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