SWIFT shows CBDCs that tokenized assets can be integrated into the global financial system


Global Financial Messaging Provider FAST has developed an infrastructure to facilitate the integration of various central bank digital currencies (CBDCs) and token assets into the global financial system.

SWIFT is a financial messaging platform that connects around 11,500 financial institutions in 200 countries to execute instant, seamless and interoperable cross-border transactions.

With the advent of blockchain technology, SWIFT decided to take up the challenge of interoperability between different blockchain networks and existing financial systems.

FAST announcement on October 5, that its infrastructure proved successful after two separate experiments, dealing with CBDCs and integrating tokenized assets.

SWIFT collaborated with Capgemini to perform a CBDC to CBDC transaction on different blockchains. Experience also successfully executed a fiat transfer to CBDC.

SWIFT Chief Innovation Officer Tom Zschach said the innovation could help meet the CBDC’s need for interoperability with the existing financial system.

Zschach added:

“For CBDCs, our solution will allow central banks to simply and directly connect their own network to all other payment systems around the world through a single gateway, ensuring an instant and smooth flow of cross-border payments.”

SWIFT for tokenized assets

According to the World Economic Forum (WEF), the tokenized asset market could reach a valuation of $24 trillion by 2027. Harness its potential to provide greater market liquidity. SWIFT has developed its infrastructure to connect multiple tokenization platforms.

SWIFT partnered with Citi, Clearstream, Northern Trust and SETL to simulate 70 market scenarios for the issuance and transfer of bonds, stocks and tokenized cash.

The platform has successfully served as a single access point for the creation, transfer and redemption of tokenized assets. It also provided interoperability between multiple tokenization platforms.

Zschach said:

“Tokenization has great potential when it comes to enhancing liquidity in markets and increasing access to investment opportunities, and SWIFT’s existing infrastructure can ensure that these benefits can be realized the most. as soon as possible, by as many people as possible.

Central Banks Explore CBDC Interoperability

Bank of International Settlement (BIS) recently completed the multiple CBDC “mBridge Project” which facilitated the transfer of $22 million of CBDC between four Asian central banks in Hong Kong, Thailand, China and the United Arab Emirates.

The Swedish central bank has also in partnership with the BIS, the central banks of Israel and Norway to facilitate cross-border CBDC payments.

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Don F. Davis