As a researcher with experience in the field of central bank digital currencies (CBDCs), I find Web Yang’s insights in the interview with the 21st Century Business Herald both intriguing and concerning. The rapid pace at which economies are adopting CBDCs is commendable, but it also presents a significant challenge: achieving interoperability among these systems to prevent fragmentation and data silos.
In a recent conversation with the 21st Century Business Herald, Web Yang, the President of SWIFT China, shared insights on the obstacles and proposed remedies for realizing compatibility among central bank digital currencies (CBDCs) used across borders.
Yang pointed out that diverse economic entities are implementing distinct technological methods and frameworks for Central Bank Digital Currencies (CBDCs), resulting in fractured CBDC ecosystems and the potential danger of establishing separate “data enclaves.”
“Yang pointed out that economies currently follow distinct technological routes and employ various standards, resulting in a ‘fragmentation’ issue. This situation creates ‘data silos’ as information cannot flow freely between different systems.”
Eleven countries have already introduced their central bank digital currencies (CBDCs), with several more in the process of implementation.
Approximately 130 economies worldwide are investigating Central Bank Digital Currencies (CBDCs), and approximately 70% of central banks intend to launch them within the next ten years. This swift progress, however, brings up worries about potential incompatibility between different CBDC systems.
As a researcher examining the global shift towards digital currencies, I’ve observed that China has successfully integrated its digital yuan into various applications. On the other hand, the European Central Bank is actively working on launching a digital Euro. In India, commercial banks are processing approximately one million digital rupee transactions daily across the country.
Yang revealed that SWIFT intends to expand the scope of its CBDC (Central Bank Digital Currency) connector solution, enabling it to explore more complex use cases in a thorough setup. This enhancement will primarily focus on enhancing capabilities for on-chain foreign exchange settlements and facilitating cross-border payments, responding to increasing market requirements.
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2024-05-17 13:41