Global financial messaging network Swift has announced that three central banks are currently beta testing its central bank digital currency (CBDC) interoperability solution. This initiative is part of Swift’s broader exploration of CBDC use cases, involving more than 30 financial institutions, media reports said.
The primary objective of the interoperability project is to facilitate the use of CBDCs for cross-border payments. The update reveals that three central banks, including the Hong Kong Monetary Authority and the Central Bank of Kazakhstan, are in the process of integrating Swift’s solution into their CBDC infrastructure.
Swift’s Chief Innovation Officer, Tom Zschach, emphasized their focus on interoperability, ensuring that new digital currencies can seamlessly coexist with one another and with existing fiat-based currencies and payment systems.
The CBDC connector infrastructure was developed by Swift through a sandbox testing process initiated in March. The initial phase involved 18 global financial institutions, such as the Royal Bank of Canada, Banque de France, Société Générale, BNP Paribas, Monetary Authority of Singapore, HSBC, Deutsche Bundesbank, and NatWest. During this 12-week collaborative testing period, participants successfully processed a total of 4,736 transactions involving Quorum and Corda blockchain networks, as well as transactions between Corda and a fiat currency.
Swift is now moving on to the second phase of CBDC sandbox experiments, where it will explore multiple use cases. This phase involves over 30 institutions, including the Reserve Bank of Australia, Deutsche Bundesbank, Hong Kong Monetary Authority (HKMA), and Bank of Thailand. They are investigating various use cases, including trigger-based payments for digital trade platforms, foreign exchange models, delivery vs. payment, and liquidity-saving mechanisms.