It conducted an 8-month experiment before it put out this particular type of solution.
The experiment was conducted in France and Germany and had the backing of financial leaders, including HSBC, Standard Chartered, and UBS. They have created something that will be used across borders and could be converted back to fiat currencies.
October 07, 2022
About 90% of global banks are already looking at the possibility of developing digital currencies that may be used across the globe. It is something big, generating a lot of attention from major institutional players worldwide.
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SWIFT’s head of innovation, Nick Kerigan, stated that the trial looked something like a bicycle with 14 central and commercial banks participating in it in total. He said that all those banks fed their information and results back to the central hub, just like the spokes of a bicycle feed back into the wheel’s central hub.
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The assumption is that once this global currency comes to fruition, it may be possible to allow the bank to set up just one global connection to move its money around where it needs to go. This is preferable for many compared to the thousands of connections necessary in today’s world to get money around where it needs to go.
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Central banks see global digital currencies as a potentially great solution for getting money moved around where it needs to go. The fact that many banks are already experimenting with it shows that they are getting serious about providing this type of product to the world.
A few countries already have digital currencies that their central government controls, at least in part. The two countries that come to mind are the Bahamas and Nigeria. They are already doing a great job of pushing those currencies out to the people within the country that need them.
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Therefore, it is essential to look at what those two countries have done to see if there might be a long future for this idea on a global scale.
The main advantage that SWIFT would have over individual countries setting up digital currencies is that SWIFT already has an existing network in over 200 countries and 11,500 banks. Thus, it could quickly set up a very effective system if they get it right.
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