SWIFT, a bank messaging service founded in the 1970s, is attempting to stay current by connecting CBDCs such as eNaira to one another as well as traditional currencies.
SWIFT stated Thursday that it has partnered with Capgemini, a French IT firm, to test cross-border central bank digital currency (CBDC) payments as part of a new study. SWIFT is a Belgian network that banks use for international money transactions. This is SWIFT’s second project involving CBDC.
“Capgemini and SWIFT are working together to develop a proof of concept to link a variety of CBDC networks along with other traditional currency networks. Globally, most central banks are creating CBDCs, ‘with a number of banks using different technologies, standards, and protocols for their digital currencies”, SWIFT’s chief innovation officer Thomas Zschach said.
According to the company’s announcement, it will create a gateway that will intercept, translate, and send domestic CBDC transactions to SWIFT for further transmission. It will use current SWIFT protocols, authentication models, and infrastructure.
SWIFT connects over 11000 financial institutions in 200 countries. The new partnership builds on the work SWIFT began with Accenture last year. A CBDC network and an RTGS system were able to conduct a cross-border transaction as a result of their collaboration.
If the experiments are successful, they will show that SWIFT has the capability and technical components to connect different networks.
SWIFT’s head of innovation Nick Kerigan stated, “This would help CBDCs address a major industry concern. We can also assist central banks with creating their oBDC networks capable of cross-border payments”.
Last year, the SWIFT network processed 42 million messages each day, although transactions sometimes take several days to process. It attempts to maintain its significance as part of the world economic order, particularly concerning CBDCs.
Some developers expect that CBDCs will interact outside of the regular network, maybe through the use of Ripple (XRP).