- New report discusses opportunities and challenges of CBDCs for international payments
- Sets out practical requirements for adoption of digital currency at scale
- Outlines how SWIFT can support the financial community as new solutions are developed
More than half the world’s central banks are actively exploring the use of CBDCs, a development that could lead to profound change in the global payments ecosystem. This paper explores the practicalities of such a shift – from the ways in which CBDCs would move across jurisdictions to the integration of CBDCs into the mix of currencies that already exist — and details what is required for CBDCs to be a viable solution in international payments.
David Treat, a senior managing director at Accenture who leads its Blockchain and Multi-Party Systems practice globally said that Central Bank Digital Currency has emerged as an important new tool in the global push to modernize financial infrastructure to meet the needs of an increasingly digital and connected world. “As an integral part of the financial services infrastructure, SWIFT plays a critical role in illustrating the possible strategic moves its members may undertake as CBDC begins to transform the financial services landscape,” Treat said.
Interoperability will be key to their success, according to SWIFT, and while CBDCs present new challenges and opportunities, the paper concludes that continued exploration of CBDCs are likely to leverage existing payments rails where possible, new solutions will become an extension of current infrastructure, and that SWIFT has a unique role to play in a payments ecosystem that includes CBDCs.
To that end, SWIFT said it is undertaking a deeper dive into CBDCs through thought leadership and experimentation over the coming months. This includes trials to see how SWIFT’s evolving platform and renewed focus on transaction management services under its new strategy to enable instant, frictionless payments across 4 billion accounts globally – agnostic of standards, technologies and currencies – could interact with the cross-border use of CBDCs. In collaboration with the community, 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.
“Making payments infrastructure based on CBDCs efficient and interoperable with the broader economy presents some new challenges, but the majority are the same as those faced by existing payment solutions,” said Thomas Zschach, Chief Innovation Officer, SWIFT . “As a co-operative that is neutral and currency agnostic, with reach across 11,000 institutions in more than 200 countries, and oversight by central banks globally, SWIFT is well placed to engage closely in the debate and any future evolution of money,” Zschach said.