In the upcoming year or two, SWIFT, the worldwide bank messaging network, intends to introduce a new platform to link the emergence of central bank digital currencies (CBDCs) being created and introduced in the world financial market.

As reported by Reuters, one of the most important developments in the rapidly developing CBDC ecosystem will be the creation of a network of CBDC platforms by SWIFT's new platform.

It is anticipated that as soon as the first significant CBDC currencies hit the market, SWIFT's network will go live.

SWIFT: Encouraging CBDC growth

Due to the increasing demand for digital currency due to the rise in popularity of cryptocurrencies like Bitcoin, about 90% of the world's central banks are now investigating the possibility of doing so.

Indeed, FinTech Magazine reported on Bitcoin's notable rebound at the end of February 2024, and it has since eclipsed its all-time valuation record of US$69,000.

The introduction of cryptocurrency and other blockchain-based payment technology is something that many major central banks are eager to embrace, but doing so is not without its challenges.

The definition of a worldwide standard is still up for debate, as CBDCs are expected to be introduced in markets from the US to Japan.

Nevertheless, SWIFT intends to be prepared to include autonomous CBDCs into a larger ecosystem when these problems are resolved.

We published forecasts from the Bank of International Settlements (BIS) last year, stating that by 2030, there should be nine wholesale and fifteen retail CBDCs in use.

According to Nick Kerigan, Head of Innovation at SWIFT, a six-month experiment including 38 central banks, settlement platforms, and commercial banks was conducted to develop a CBDC network.

One of the greatest partnerships on tokenized assets to date is the drive to establish SWIFT's CBDC network.

The SWIFT platform is designed to, in principle, guarantee the interoperability of CBDCs from various nations, regardless of the technology on which they are based. This lowers the possibility of payments system fragmentation.

Kerrigan continues, "We are examining a plan to productize, or introduce as a product, during the following 12 to 24 months.

"It's moving out of the experimental stage towards something that is becoming a reality."

As banking moves farther into the digital era, being the first to introduce a CBDC network would guarantee that SWIFT maintains its position as the top incumbent bank-to-bank plumbing network.