Swift Collaborates with Three Central Banks to Pilot CBDC Interoperability

cryptonews.com:

Swift has partnered with three central banks to conduct beta testing of its central bank digital currency (CBDC) connector solution in an effort to advance cross-border payments using CBDCs.

In a recent press release, the global financial messaging network said that the Hong Kong Monetary Authority and the Central Bank of Kazakhstan are among the three central banks currently integrating its solution with their CBDC infrastructure.

The collaborative project aims to establish interoperability among CBDCs, enabling seamless transactions across different digital currencies. 

"Our focus is on interoperability – ensuring that new digital currencies can seamlessly coexist with each other and with today’s fiat-based currencies and payment systems," Swift Chief Innovation Officer Tom Zschach said.

"The financial community has already recognised the strong potential of our CBDC innovations for preventing digital islands while securely bridging the payment systems of today and the future."

Back in March, the bank started the development of the CBDC connector infrastructure using a sandbox testing process.

Swift has reported that the initial phase of testing involved 18 global financial institutions, including HSBC, Banque de France, and the Royal Bank of Canada. 

During this period, participants successfully processed 4,736 transactions between the Quorum and Corda blockchain networks, as well as between Corda and a fiat currency.

Building upon the success of the initial phase, Swift has now entered the second phase of CBDC sandbox experiments exploring various use-cases. 

This phase involves over 30 institutions, including the Reserve Bank of Australia, Deutsche Bundesbank, HKMA, and Bank of Thailand. 

The focus of this phase includes