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.
Judith Faith has been writing about cryptocurrencies and blockchain technology for over five years. She is well versed in the industry and has an extensive network of industry contacts. She is also a frequent contributor to various cryptocurrency publications. With her vast knowledge and experience, she is able to provide insightful and valuable content to her readers. Judith is also an active investor in the cryptocurrency space and has a vested interest in the success of the industry.
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