The central bank digital currency (CBDC) interconnection project being administered by interbank messaging company SWIFT has “obvious promise and value,” the company said in a statement on Thursday.
The project, which involved banks including BNP Paribas, Intesa San Paolo, and Standard Chartered as well as the central banks of France and Singapore, will now move on to a second phase that may look at additional applications like trade financing and securities settlement.
The project could result in “faster, cheaper and more secure payments,” according to Lewis Sun, Global Head of Domestic and Emerging Payments at HSBC. “While interest in CBDCs is growing, so is the risk of fragmentation as a wide range of technologies and standards are being experimented with,” he added.
In the upcoming months, SWIFT said it will begin beta testing and enter a second phase to examine applications including conditional payments.
While nations like the U.K. and the European Union are considering issuing digital versions of their national currencies, nations like The Bahamas and Nigeria have already done so.
As authorities attempt to reduce the time and expense associated with making international payments, organisations like the International Monetary Fund and the Bank for International Settlements have called on central banks to collaborate on their work.
