SWIFT China President Wen Yang on Overcoming Barriers in CBDC Systems

cryptonews.com:

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) China President recently shared insights on the challenges and solutions for cross-border central bank digital currency (CBDC) interoperability.

In an interview with 21st Century Business Herald, Wen Yang addressed the fragmentation in CBDC systems due to varying technological paths and standards among different economies, highlighting the organization’s effort to bridge technical gaps.

According to the report, over 130 economies are now exploring CBDCs, with nearly 70% of central banks expecting to issue them within the next decade. However, the rapid development could lead to potential “data silos” where systems are unable to communicate with one another.

“Currently, there are significant differences in the technological paths and standards, including protocols, among economies, which presents a ‘fragmentation’ challenge and leads to ‘data silos’,” said Yang.

“To date, 11 countries have fully launched their CBDCs, while others are in later stages of development,” said Yang.

China’s digital yuan has seen implementation across various applications, while the European Central Bank is in the process of preparing for a digital Euro. In India, commercial banks handle one million digital rupee transactions daily across the country.

Swift launched the second phase of its CBDC sandbox in July 2023, focusing on complex use cases in digital trade, digital assets, and foreign exchange networks for CBDC payments and settlements.

“The project lasted six months and involved 38 financial institutions from around the world, including regulators, commercial banks, and market infrastructures, involving applications of seven different CBDCs,” said Yang.

Yang also emphasized