Financial messaging services provider SWIFTsenses an opportunity to expand operations as more than half the world’s central banks are 'actively exploring' the use of central bank digital currencies.
This is "a development that could lead to profound change in the global payments ecosystem," SWIFT has warned in a paper on the possible role of CBDCs in cross-border payments, co-authored with Accenture.
The paper explores the practicalities of a shift into these new forms of currency – from the ways in which CBDCs would move across jurisdictions – to their integration into the mix of currencies that already exist.
Unsurprisingly, SWIFT concluded that cross border transactions based around CBDCs are likely to use existing payments rails, where possible. This is one area where the messaging service sees a real opportunity for itself – and a need to defend its turf.
With this in mind, SWIFT has started running two "experiments" to show how its services could interact with the cross-border use of digital currencies by providing the distributed ledger technology network upon which CBDCs are built.
SWIFT said it intends to prove how it can "orchestrate cross-border transactions between entities on two different networks (DLT and non-DLT), and then between entities on two different DLT networks – one network built on Corda, and the other on Quorum".
(Sweden's Riksbank in developing the e-Krona, has used R3’s Corda platform, while the Hong Kong Monetary Authority is using on the Quorum platform.)
"SWIFT intends to explore its role further - both as a carrier of authenticated information about CBDC transactions, as it does today for fiat currencies, and as a carrier of actual CBDC value in whatever form it is issued," the bank-owned co-operative stated in its discussion paper.