On October 5, 2022, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) released the following reports suggesting that central bank digital currencies (CBDCs) and tokenized assets can integrate into the international financial ecosystem:

SWIFT notes in the CBDC report that there is a growing momentum towards exploring CBDCs among central banks globally. The CBDC report cites a recent report from the Bank for International Settlements (BIS), which observed that nine out of ten central banks are now exploring CBDCs, covering the economies that account for more than 90% of the global gross domestic product (GDP). These banks often use different technologies and keep their primary focus on domestic use. For the potential of CBDCs to be fully realized across borders, these digital currencies need to overcome inherent differences to interact with each other, as well as with traditional fiat currencies.

SWIFT collaborated with international technology services and consulting company Capgemini SE to demonstrate a potential integration solution called a "connector gateway" that is capable of interlinking CBDC networks and existing payment systems for cross-border transactions, creating a technical connection between networks to achieve interoperability. The introduction of a connector gateway can provide CBDC network operators at central banks with a simple integration of domestic CBDC networks into cross-border payments while also giving the CBDC network operator the flexibility to:

To continue its CBDC experiments, in September 2022 SWIFT established a CBDC sandbox and visual interface that is being used by certain central banks, market infrastructures, and commercial banks to assess potential use cases and wider CBDC interoperability. SWIFT will seek feedback through its sandbox and visual interface through late 2022 and plans to use any feedback to shape its strategic approach for digital currencies moving forward. For information on the SWIFT sandbox, contact [email protected].

SWIFT notes in the tokenized asset report that tokenization of assets is a growing trend in financial services as well as other industries, specifically targeting legacy assets with limited liquidity and multiple layers of disintermediation. Working in collaboration with Northern Trust Corporation, Citibank, N.A., Clearstream, LLC, and SWIFT's technology partner SETL Limited, SWIFT explored the feasibility of SWIFT acting as an interconnector and "single access point," linking multiple tokenization platforms and various cash leg payment types, with clients interacting with tokenized assets via SWIFT. Its goal was to simulate primary token issuance and secondary market transfers of tokenized bonds, equities, and cash by using different tokenized assets and cash settlement environments, illustrating the ability to create, transfer, and redeem tokens and update balances between multiple client wallets.

Upon completion of this experiment, having tested 70 scenarios, SWIFT asserts that it has demonstrated the feasibility of its simulated solution across both the primary and secondary use cases, single and multiple tokenization platforms, bond and equity tokens, and multiple cash leg types in different combinations with a representative number of transactions. According to the tokenized asset report, the experiment also demonstrated multiple benefits of the solution, including efficiencies that can be achieved through accessing tokenized assets via existing SWIFT connectivity channels. According to the report, the experiment's results show that SWIFT can achieve interoperability between "old" and "new" payment worlds.

The report states that the experiment demonstrated that SWIFT can enable the creation, transfer, and redemption of tokens and update of balances, irrespective of the platform in which the digital wallet is held. SWIFT was also able to explore and show some of the theoretical benefits of digital assets and tokenized securities, such as:

SWIFT reported several key findings of its tokenized asset experiment, including:

The tokenized asset report invites public feedback on the experiment, which can be provided by contacting [email protected].