SWIFT Targets 2025 To Test Digital Currency Trades As Central Authorities Look To Keep Pace With Bitcoin's Efficiency

Global banking network SWIFT is set to trial live transactions involving digital currencies and tokenized assets next year, marking a significant advancement in integrating these assets into the mainstream financial system.

What Happened: SWIFT’s initiative aims to streamline trading by using blockchain-based tokens to represent traditional assets like bonds. This move is expected to make trading faster, more cost-effective, and more efficient. Despite ongoing efforts, tokenized assets have not yet achieved widespread market adoption, Reuters reported.

Currently, around 90% of the world’s central banks are experimenting with central bank digital currencies (CBDCs), which are digital versions of fiat money, to facilitate the trading of tokenized assets. SWIFT has been actively involved in trials of both CBDCs and tokenized assets.

Monetary authorities are working to keep pace with the technological advancements that have facilitated the rise of cryptocurrencies such as Bitcoin BTC/USD.

In March, SWIFT announced plans to launch a new platform to connect developing CBDCs with the existing financial system. Nick Kerigan, SWIFT’s head of innovation, emphasized the industry’s demand to transition from trials to real transactions with digital assets.

See Also: ‘Meme Coin Supercycle’ Means 13 Out Of Top 20 Outperforming Tokens Are Memes: Will Shiba, Dogecoin Be First To Reach $100B?

Why It Matters: The move by SWIFT to initiate live digital currency transactions is a pivotal step in the evolution of the global financial system.

Earlier this year, SWIFT revealed plans to launch a platform that would connect emerging CBDCs with the current financial infrastructure, expected to be a game-changer for the CBDC ecosystem. This development aligns with the broader trend of central banks exploring CBDCs, with central banks representing two-thirds of the world’s nations currently involved in such explorations.

However, the introduction of CBDCs has not been without controversy. Some critics, like Mark Jeffrey, have voiced concerns about CBDCs being a potential “ultimate totalitarian tool,” calling for resistance against their implementation.

Despite these concerns, the Russian Central Bank has announced plans for widespread digital ruble use by 2025, further indicating the global shift towards digital currencies.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote