The Central Banks Take the Plunge
On September 13, SWIFT, the global financial messaging giant, announced that three central banks are stepping into the beta phase of its central bank digital currency (CBDC) interoperability project. Talk about a digital leap! The Hong Kong Monetary Authority, the Central Bank of Kazakhstan, and a mystery central bank are now busy tinkering with SWIFT’s “CBDC connector solution.” It’s like a high-tech version of the Three Musketeers, but with fewer swords and more blockchain.
Big Testing, Bigger Numbers
SWIFT is ramping up its sandbox testing phase, which kicked off back in March with a whopping lineup of over 18 participants. These included heavyweights like the Royal Bank of Canada and HSBC. Fast forward to the present day, and that number is set to grow to over 30. During the initial run, the sandbox facilitated a mind-boggling 5,000 transactions in just 12 weeks. Who says finance isn’t fun?
The Dark Side of Innovation
While SWIFT is embracing CBDCs, it’s worth noting that there’s a bit of rivalry brewing. With over 11,500 financial institutions connected through its messaging network, SWIFT has made its mark, but CBDCs could pose a threat. As the classic saying goes, competition breeds innovation, and with interlinking projects sprouting from the Bank for International Settlements, things are getting spicy.
Quick Settlements: A Race Against Time
In an impressive feat, SWIFT disclosed that 89% of transactions are processed within one hour, surpassing the G20’s target of 75% by 2027. Yet, in a plot twist fit for a soap opera, actual wholesale payments clock in at about 60% due to regulatory hoops, working hours, and the joys of batch processing. It seems time isn’t always on our side!
Telegram Joins the Party
Today’s #Fintech Digest also highlights Telegram integrating The Open Network (TON) into its self-custodial crypto wallet, now available for its staggering 800 million active users. The digital currency party just got bigger and we can’t wait to see how it unfolds!
