SWIFT has successfully concluded its second testing phase for Central Bank Digital Currencies (CBDCs), with a specific emphasis on digital ledger technology (DLT) and smart contracts.
The six-month trial demonstrated the capacity of the SWIFT connector to link together existing CBDC networks without the need to create a new digital currency.
The connector leverages Distributed Ledger Technology (DLT) and smart contracts to guarantee precise and uniform transaction records, offering possible use cases in digital commerce, securities, and international trade.
The demonstration showcased the use of typical financial applications, including trade payments, foreign currency, and liquidity-saving methods.
The introduction of atomic settlements and swaps provided a novel and efficient technique for exchanging assets instantly, resembling the conventional financial system’s delivery versus payment (DvP) approach.
SWIFT intends to create a strategic strategy for the CBDC connection, ensuring it aligns with market developments and preparedness.
This decision is in line with the increasing global interest in Central Bank Digital Currencies (CBDCs), as several nations have already implemented their own digital currencies and more than 130 countries are now researching the idea.
