The global bank messaging system SWIFT is planning to launch a new Central Bank Digital Currency (CBDC). The SWIFT CBDC is a significant development in the changing financial landscape that’s looking to uproot the US dollar’s hegemony. The new digital ecosystem is currently in its nascent stage and could be launched in the next 12 to 24 months. The development puts the SWIFT CBDC in direct competition to challenge the yet-to-be-released BRICS currency.
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Nick Kerigan, SWIFT’s Head of Innovation confirmed that a new CBDC currency is on the cards. Therefore, the next two years could put the Western financial system on the course of recovery in a de-dollarized world. In two years, trades in the SWIFT system could be settled in CBDC currencies giving BRICS a reality check. The payment system is now being fine-tuned on the heels of BRICS planning to launch a new currency.
Apart from SWIFT, nearly 90% of all the world’s Central Banks are exploring CBDCs and a few of them have started pilot runs. CBDCs could usher the world into a new financial era and the West wants to be ahead of BRICS in this segment.
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BRICS: A New CBDC Currency For SWIFT System On the Cards
Kerigan confirmed that the SWIFT CBDC initiated a six-month test run that included a 38-member group of Central Banks, commercial banks, and settlement platforms. He said that it’s the largest global collaboration for CBDCs and tokenized assets to date. If the pace continues, SWIFT CBDC could be launched much before the BRICS currency on the global stage.
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“We are looking at a roadmap to productize (product launch) in the next 12-24 months,” Kerigan told Reuters. “It’s moving out of experimental stage towards something that is becoming a reality,” he said.
The BRICS dream of de-dollarization could become more challenging if the SWIFT CBDC becomes the common payment mode. The new digital payment system could be much ahead in release than its competitors. In conclusion, the next few years will decide the fate of both the SWIFT CBDC and the BRICS currency in the international financial landscape.