Ripple Faces New Challenge as Swift Advances CBDC Cross-Border Testing
Global financial messaging giant Swift has announced progress in its CBDC interoperability solution testing. Swift is working closely with the financial community so that, as CBDCs evolve, they could be used cross-border as well.
Exciting news! Our #CBDC sandbox tests with 18 central & commercial banks showed clear value in our solution to enable interoperability with CBDC networks & existing systems for x-border payments. Check out the full details & hear from participants: https://t.co/n3zrPM0WGB pic.twitter.com/wgafu7skQl
— Swift (@swiftcommunity) March 9, 2023
This led to the development of its solution to enable CBDCs to move between DLT-based and fiat-based systems using existing financial infrastructure in October 2022.
Swift says it has now tested the solution in a sandbox environment with 18 central and commercial banks, including the Banque de France, the Deutsche Bundesbank and the Monetary Authority of Singapore, among others.
An additional four central banks were observers without participating in the sandbox testing.
Following positive feedback from the testing, the financial messaging giant says that in the coming months, it will develop a beta version of the solution for payments.
A second phase of sandbox testing will also be held with a focus on new use cases, including cross-asset exchange, trade finance and conditional payments.
Ripple moves on CBDC interoperability
Ripple sponsored a CBDC Innovate Challenge in 2022, where developers were encouraged to build CBDC applications using Ripple’s technology, in three categories: retail, interoperability and financial inclusion.
SpendTheBits (STB), which is XRP Ledger-based, allows retail users to make payments in multiple currencies, including CBDCs, cryptocurrencies and stablecoins.
The SpendTheBits app incorporates a CBDC portal, a mobile and merchant app, and an exchange portal to allow interoperability and liquidity.
In related news, Brooks Entwistle, managing director of APAC and MENA at Ripple, recently said in an interview that the company was in talks with more than 20 central banks regarding the development of a central bank digital currency (CBDC).
