SWIFT and Capgemini have achieved CBDC-to-CBDC transactions between different distributed ledger technology networks based on Quorum and Corda technologies, as well as fiat-to-CBDC flows between these networks and a real-time gross settlement system.

The experiment showed that the blockchain networks could be interlinked for cross-border payments through a single gateway, and that SWIFT’s new transaction management capabilities could orchestrate all inter-network communication.

Results of SWIFT experiments interlinking CBDC networks and existing payments systems to achieve global interoperability. Source: SWIFT and Capgemini’s “Connecting digital islands: CBDCs” report (October 2022)

14 central and commercial banks, including Banque de France, Deutsche Bundesbank, HSBC, Intesa Sanpaolo, NatWest, SMBC, Standard Chartered, UBS and Wells Fargo, are now collaborating in a testing environment to accelerate the path to full scale deployment.

In a separate experiment with a different group of participants, SWIFT similarly demonstrated that its infrastructure can serve as an interconnector between multiple tokenisation platforms and different types of cash payment.

Use case: DvP transactions via two tokenisation platforms. Source: SWIFT’s “Connecting digital islands: Tokenised assets” report (October 2022)

Working in collaboration with Citi, Clearstream, Northern Trust, and technology partner SETL, SWIFT explored 70 scenarios simulating market issuance and secondary market transfers of tokenised bonds, equities and cash.

It successfully served as a single access point to various tokenised networks and showed its infrastructure could be used to create, transfer and redeem tokens and update balances between multiple client wallets, as well as provide interoperability between different tokenisation platforms and existing account-based infrastructure.

Tom Zschach

“We see inclusivity and interoperability as central pillars of the financial ecosystem, and our innovation is a major step towards unlocking the potential of the digital future.

For central bank digital currencies (CBDCs), our solution will enable central banks to connect their own networks simply and directly to all the other payments systems in the world through a single gateway, ensuring the instant and smooth flow of cross-border payments,”

said Tom Zschach, Chief Innovation Officer at SWIFT.