CBDCs ‘could be a huge force’ in the future, says SWIFT innovation chief
More nations and banks are beginning to take steps that might pave the way for the implementation of a central bank digital currency (CBDC), enabling them to easily control digital currencies.
Managing Director and Head of Innovation at SWIFT Nick Kerigan wrote a LinkedIn article on April 14 describing the rising interest in CBDCs throughout the globe, with a wide range of nations currently developing their own.
CBDCs are also being developed by central banks throughout the world, partly to enhance the efficiency of conventional payment systems and partly to solve the issues posed by digital currencies.
While speaking at Finovate Europe earlier this year, Kerigan said that CBDCs might become a big player in the near future.
Over the last several years, interest in CBDCs has progressively increased, with central banks in 87 countries experimenting with their own. Regulated digital currencies might be a huge force in the not-so-distant future, he added, since these nations together account for more than 90% of global GDP.”
Each new digital currency has its own unique blend of technology, standards and protocols. Kerigan was aware of this fact, which is promising.
Because of their importance in cross-border payments, the CEO argues, “it is more necessary to avoid fragmentation and guarantee that they are all linked.”
Then he added: To solve this problem, we’re particularly qualified since we’re part of the global financial system and a major network and mutual service provider.” SWIFT is looking at its possible function in space after a series of successful trial projects last year.
Last but not least, Kerigan emphasised the advantages of tokenized assets, which are digital representations of equities, bonds and commodities.
This market has the ability to open up new income streams for organisations that were previously unavailable.” However, as an industry, we must overcome several obstacles before we can reap these advantages.”
The head of innovation at SWIFT has said that the company is focusing on simplifying the post-trade processing of tokenized assets.
There are a lot of different technologies, platforms, legal frameworks and payment types that security players have to navigate through in order to accomplish a tokenized transaction.