SWIFT, the payment systems giant, has published the first reports of these experiments on central bank digital currencies (MNBC) and the tokenization of finance. The objective is thus to create a technology allowing different heterogeneous systems to communicate with each other.
SWIFT presents its experimental work on MNBCs
As more and more central banks explore the issue of digital currencies (MNBC), SWIFT presented its first results of experiments on the subject.
The basic observation answers an obvious problem: all these MNBC will not be based on the same system. From there, several challenges come into play, such as the compatibility of these systems to communicate with each other. It is therefore on this axis that SWIFT has carried out work.
For this, it has, for example, simulated two different systems, through the blockchain Corda developed by R3as well as Quorum, originally developed by JP Morgan, then acquired in 2020 by ConsenSys. In this experiment, a kind of bridge was created using a model called ” Hashed TimeLock Contract (HTLC)”.
In a rather simplified vision, the HTLC makes it possible to create a channel between two actors, so they can transact as many times as they want. They are thus freed from the constraints of time and costs of the blockchain used, and the balance of these operations is only recorded on the network when this channel is closed. One of the most well-known application cases of HTLC is the Lightning Network.
Another of these experiments involved communicating a model of MNBC based on a blockchain, and another based on one of the settlement systems currently used for real-time wholesale payments (RTGS).
👉 Going Deeper – What is a Central Bank Digital Currency (MNBC)
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Work on asset tokenization
This work is therefore based on what central banks describe as Wholesale MNBCintended for institutional players, unlike a Details MNBCwhich would be used for daily payments.
The tokenization of finance is part of one of the great issues of institutional economics and its various issues were discussed at a Banque de France conference last week. Thus, in addition to MNBCs, SWIFT has also worked on systems to promote this tokenization on a larger scale.
Tom Zschach, Chief Innovation Officer at SWIFT, was convinced of the need to develop these technologies:
“Tokenization has great potential when it comes to enhancing liquidity in markets and increasing access to investment opportunities, and SWIFT’s existing infrastructure can ensure that these benefits can be realized the most. as soon as possible, by as many people as possible. »
All these experiments thus reaffirm the weight of innovations brought by blockchain technologies. Indeed, they are increasingly integrated into the financial landscape, and this, in different parts of the global economy.
👉 Also read – What is a token, this essential element in the blockchain universe?
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Source: Press release
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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