Hot Fintech News: Three Central Banks Are Testing CBDC Digital Currency Interoperability - The First Step For The Cashless Plan Is Approaching.
On September 13, 2023, in Brussels, in an announcement, Swift announced that he had entered a new, extremely groundbreaking phase in resolving issues related to Central Bank Digital Currency when three countries had implemented its innovative solution of linking together CBDCs and 30 other countries have started a sandbox model to test this solution.
Swift announcing new experiment about the connecting CBDCs between nations
*Swift committed to developing a beta version of its CBDC connector solution after the first iteration of sandbox testing, with participants recognizing the solution’s ‘clear potential and value’. The beta solution has taken its next step, with three central banks and monetary authorities, including the Hong Kong Monetary Authority (HKMA) and the National Bank of Kazakhstan, integrating the solution with their own infrastructure for direct testing.
Swift has also initiated a second phase of sandbox testing, in which commercial banks, central banks, and financial market infrastructures are exploring additional use cases, including trigger-based payments for digital trade platforms, foreign exchange models, delivery vs. payment, and liquidity-saving mechanisms. The Reserve Bank of Australia, Deutsche Bundesbank, HKMA, Bank of Thailand, and CLS are among the enlarged group of more than 30 leading institutions in this second phase. Eighteen central and commercial banks took part in the first phase of the sandbox.*
The First Step For The Cashless Plan Is Approaching.
The Swift system has helped connect international banks together since 1973.
It is this organization that has helped the world solve the problem of transferring money between countries with different currencies and different economies faster by providing a system to help transfer money between countries with different currencies and different economies faster. Information becomes fast, accurate, and secure.
Although SWIFT has gradually become an essential part of the global financial and monetary infrastructure, it still does not directly hold or transact assets. SWIFT only optimizes tools to create a secure, secure communication environment.
CBDC - a tool that can help Swift further optimize its security system along with supporting faster money transfers.
The purpose of this currency is to replace or supplement cash and deposits in the country's financial system.
CBDCs can be used like conventional currencies to pay for products and services. It can be stored in e-wallets or online bank accounts.
Countries are researching and implementing CBDC as part of efforts to modernize their financial systems, reduce dependence on cash, and increase the efficiency and safety of financial transactions.
The adoption of CBDCs will also provide this country with the assurance that the financial crisis will be minimized, as well as the expense of printing money in bulk.
In particular, CBDC also supports faster international transactions between banks when using blockchain technology with peer-to-peer money transfers without having to go through any intermediary or create any Vostro account at any bank.
With existing utilities being able to link the international banking system together, if Swift can progress it by connecting CBDCs together, it will create a great breakthrough for promoting the movement of cashless payments to prevent inflation and protect the environment.
CBDC is then a tool that can help Swift further optimize its security system along with supporting money transfers faster, safer, and cheaper than before.
People who often must go to the counter to send cash across borders due to concerns about bank fees will have to rethink and change their international money transfer method.