The Society for Worldwide Interbank Financial Telecommunication (SWIFT), a key player in the global banking network, has announced plans to develop a new platform aimed at integrating central bank digital currencies (CBDCs) with the existing financial system within the next one to two years.

According to SWIFT, about 90% of the world's central banks are exploring digital versions of their currencies. Nonetheless, they face challenges associated with the technological complexities of implementation.

Nick Kerigan, SWIFT's head of innovation, shared insights from a recent 6-month trial involving 38 entities, including central banks, commercial banks, and settlement platforms. This collaboration stands as one of the largest global efforts on CBDCs and "tokenised" assets thus far. The trial aimed to ensure interoperability among different CBDCs, even when built on disparate underlying technologies. It also explored the potential for CBDCs in complex transactions, such as trade or foreign exchange, and the possibility of automating these processes.

Kerigan revealed that the trial's outcomes were successful, demonstrating that banks could utilize their existing infrastructure and setting a timeline for SWIFT to transform the experimental findings into a tangible product. "We are looking at a roadmap to productize in the next 12-24 months," Kerigan stated in an interview with Reuters. "It's moving out of the experimental stage towards something that is becoming a reality."

Several countries, including the Bahamas, Nigeria, and Jamaica, have already launched their CBDCs, with China conducting trials of an e-yuan and the European Central Bank working on a digital euro.

SWIFT, which gained widespread recognition following its exclusion of most Russian banks in response to the invasion of Ukraine in 2022, connects over 11,500 banks and financial institutions across more than 200 countries. Kerigan noted that while exclusion from the network could still be a potential action in a CBDC system, it likely wouldn't deter countries from participating.

The recent trial saw participation from central banks in Germany, France, Australia, Singapore, the Czech Republic, and Thailand, with some preferring anonymity. Major commercial banks such as HSBC, Citibank, Deutsche Bank, Societe Generale, Standard Chartered, and the CLS FX settlement platform also took part, including two Chinese banks.

The initiative is currently poised to transition from an experimental phase to an application phase within the next 24 months.

Originally reported by Reuters