SWIFT shows CBDCs, tokenized assets can be integrated into global financial system
Global financial messaging provider fast Developed infrastructure to facilitate the integration of various Central Bank Digital Currencies (CBDC) and tokenized assets into the global financial system.
SWIFT is a financial messaging platform that connects nearly 11,500 financial institutions in 200 countries to execute fast, frictionless, and interoperable cross-border transactions.
The advent of blockchain technology has prompted SWIFT to tackle the interoperability challenges between different blockchain networks and existing financial systems.
fast announced On October 5, its infrastructure proved successful after two separate experiments addressing CBDC and tokenized asset consolidation.
SWIFT has worked with Capgemini to complete CBDC to CBDC transactions on various blockchains. The experiment also successfully carried out fiat-to-CBDC remittances.
Tom Zschach, chief innovation officer at SWIFT, said the innovation could help address CBDC’s need for interoperability with existing financial systems.
Zuschach added:
“For CBDCs, our solution will enable central banks to easily and directly connect their networks to all other payment systems around the world via a single gateway, enabling instant cross-border payments. And a smooth flow is guaranteed.”
SWIFT for tokenized assets
According to the World Economic Forum (WEF), the market for tokenized assets could reach a valuation of $24 trillion by 2027. Take advantage of the potential to provide greater market liquidity. SWIFT has developed an infrastructure that connects multiple tokenization platforms.
SWIFT partnered with Citi, Clearstream, Northern Trust and SETL to simulate 70 market scenarios for tokenized bond, equity and cash issuances and transfers.
The platform served as a single point of access for the creation, transfer and redemption of tokenized assets. It also provided interoperability between multiple tokenization platforms.
Mr Zschach said:
“Tokenization has great potential in terms of enhancing market liquidity and increasing access to investment opportunities. We can make it happen.”
Central banks considering CBDC interoperability
The Bank for International Settlements (BIS) recently completed several CBDC “mBridge projects”. It facilitated the transfer of $22 million worth of CBDC between the four Asian Central Banks of Hong Kong, Thailand, China and the UAE.
The central bank of Sweden has also partnered with the BIS, the central bank of Israel, and Norway to facilitate cross-border CBDC payments.
