A project run by interbank messaging company SWIFT to interconnect central bank digital currencies (CBDCs) offers “clear potential and value,” the company said in a statement on Thursday.
The project, which included banks such as BNP Paribas (BNP), Intesa San Paolo (ISP) and Standard Chartered (STAN), as well as French and Singaporean central banks, will now move on to a second phase which could look at further applications like trade finance and securities settlement.
“While interest in CBDCs is growing, so is the risk of fragmentation as a widening range of technologies and standards is being experimented with,” Lewis Sun, Global Head of Domestic and Emerging Payments at HSBC, said in a statement, adding that the project could lead to "faster, cheaper and more secure cross-border payments.”
SWIFT said it will move on to beta testing in the coming months, and also start a second phase looking at applications such as conditional payments.
Countries such as The Bahamas and Nigeria have already issued digital versions of their national currency, while jurisdictions such as the U.K. and European Union are exploring whether to do so. Organizations such as the International Monetary Fund and Bank for International Settlements have called for central banks to cooperate on their work, as regulators seek to cut the time and cost of making transnational payments.
Read more: SWIFT Says It's Proved It Can Be the Way Forward for Global CBDCs
