The bank messaging service SWIFT is working to link CBDCs like eNaira with one another and with traditional currencies.
SWIFT and Capgemini, a French IT business, launched a partnership on Thursday to test cross-border payments in central bank digital currency (CBDC). In international money transfers, SWIFT is the Belgian network that banks use to communicate. This is SWIFT’s second CBDC-related project.
We are developing a proof of concept with Capgemini and SWIFT, which will allow us to connect a wide range of CBDC networks and other traditional currency networks. Thomas Zschach, chief innovation officer of SWIFT, claimed that “a number of institutions are adopting different technologies, standards, and protocols” for their digital currencies.
A gateway will be built by the corporation to intercept, translate, and transfer domestic CBDC transactions to SWIFT for onward transmission, as stated in the release. SWIFT protocols, authentication mechanisms, and infrastructure will be leveraged. SWIFT connects more than 11000 financial institutions in more than 200 countries.
Last year, SWIFT formed a partnership with Accenture, which has now been expanded upon through this new partnership. CBDC and RTGS were able to carry out a cross-border transaction thanks to their cooperation. If the tests are a success, they will show that SWIFT has the capability and technological components to connect various networks.
In the words of Nick Kerigan, the head of innovation at SWIFT,
“This would assist CBDCs address a key industry challenge. We can help central banks build their own cross-border CBDC payment networks.
Last year, the SWIFT network handled 42 million messages each day, but transactions often take days to complete. It strives to preserve its relevance in relation to CBDCs as part of the world economic system.
CBDCs, according to some developers, will communicate outside of the regular network, maybe utilising Ripple’s (XRP).