Global financial messaging system SWIFT announced a framework for global use of Central Bank Digital Currencies (CBDCs) and tokenised assets, based on two separate experiments.
The framework enables rapid deployment of CBDCs and tokens at scale, to facilitate trade and investment between more than 200 countries and territories worldwide.
In the two experiments, SWIFT showed that CBDCs and tokenised assets can be moved seamlessly on existing financial infrastructure, solving the challenge of interoperability.
The experiments included Central banks of France and Germany, along with HSBC, NatWest, Standard Chartered, UBS and Wells Fargo.
They carried out transactions between different distributed ledger technology (DLT) networks and existing payment systems, using both CBDCs and fiat currencies.
In an experiment conducted together with Capgemini, SWIFT has achieved CBDC-to-CBDC transactions between different DLT networks, based on Quorum and Corda technologies.
In addition, the financial messaging system also achieved fiat-to-CBDC transfers between the two networks and a real-time gross settlement system.
SWIFT chief innovation officer Tom Zschach said: “Digital currencies and tokens have huge potential to shape the way we will all pay and invest in the future.
“But that potential can only be unleashed if the different approaches that are being explored have the ability to connect and work together.
“We see inclusivity and interoperability as central pillars of the financial ecosystem, and our innovation is a major step towards unlocking the potential of the digital future.”
In the other experiment, SWIFT showed that its infrastructure can serve as an interconnector between multiple tokenisation platforms and different types of cash payment.
The experiment was conducted in collaboration with Citi, Clearstream, Northern Trust, and SWIFT’s technology partner SETL.
SWIFT explored 70 scenarios simulating market issuance and secondary market transfers of tokenised bonds, equities and cash, serving as a single access point.
Its infrastructure enabled to create, transfer and redeem tokens, update balances, and offered interoperability between different tokenisation platforms and existing infrastructure.
Through the two experiments, SWIFT has proved its transaction management capabilities to coordinate all inter-network communication.
It showed that the blockchain networks could be interlinked for cross-border payments through a single gateway, to enable easy cross-border payments.
