Swift has announced favorable findings from a pilot test of transfers across several central bank digital currencies (CBDCs), stating that it sees “obvious promise and value” in the technology.
The pilot test examined the interoperability of several CBDCs using an API-based CBDC connector, utilizing two distinct blockchain networks and current fiat payment systems.
According to a news statement released by Swift, all pilot participants voiced “strong support” for the solution’s continuing development. The participants also agreed that the CBDC connector utilized in the simulations allowed for a “seamless interchange of CBDCs,” even when moving data across CBDCs developed for various platforms.
Given the possibility of fragmentation, the latter is deemed crucial as central banks construct their CBDCs. When the pilot test is complete, Swift will create a beta version of the system for further testing by major financial institutions. As stated by Swift in their news release, after this first round of sandbox testing, participants will be able to investigate other use cases, such as those related to securities settlement, trade finance, and conditional payments.
Eighteen commercial and central banks participated in the research, encompassing 5,000 simulated transactions over 12 weeks. Large multinational banks such as HSBC, Standard Chartered, and NatWest participated alongside central banks such as the German Bundesbank and the Monetary Authority of Singapore.
Swift’s Chief Innovation Officer, Tom Zschach, said that the research demonstrates that Swift can continue to play a crucial role in an economic environment where conventional currencies and CBDCs coexist.
“Our API-based CBDC connector has been proved to be resilient over approximately 5,000 transactions between two separate blockchain networks and conventional fiat money, and we’re thrilled to have the support of our community in growing it further,” he added.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.