On September 11, Swift unveiled a new initiative designed to enhance global transactions and support digital assets, including cryptocurrencies.
Launch of the new initiative
Swift plans to test Delivery-versus-Payment (DVP) and Payment-versus-Payment (PvP) transactions on its global platform. This initiative aims to enable real-time, simultaneous payments and exchanges of tokenized assets on Swift’s network.
The problem and its solutions
The initiative aims to address an interoperability issue in the global tokenized asset industry, which has led to fragmented digital islands due to the lack of a universally accepted digital currency.
Directions and prospects of the initiative
Initially, fiat currencies will be used, but the initiative will later expand to include central bank digital currencies (CBDC), tokenized commercial bank money, and regulated stablecoins. Swift also highlighted successful value transfer tests involving tokenized assets and CBDCs, as well as two CBDC sandboxes with banks from Europe, Asia, and North America.
Swift's initiative aims to provide a unified payment infrastructure for tokenized assets and integrate different digital assets with existing bank-led networks. The varied distributed ledger technologies and disparate regulatory environments could pose challenges to global interoperability.
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