Central bank digital currencies (CBDCs), foreign exchange, and payments were all in focus during SWIFT’s CBDC connector second trials, the results of which were released on March 25.
The trials explored how to interconnect CBDC systems across multiple jurisdictions. Thirty-eight institutions, including central banks and monetary authorities from Australia, Czechia, France, Germany, Taiwan, Singapore, and Thailand, participated. Commercial banks like ANZ (NASDAQ: ANZGF), Deutsche Bank (NASDAQ: DB), NatWest (NASDAQ: RBSPF), Santander (NASDAQ: BCDRF), and the Westpac Banking Corporation (NASDAQ: WEBNF) were also involved.
SWIFT plans to launch the solution in 12-24 months, enabling CBDC systems to communicate via messaging and giving central banks visibility over their currencies on a network they don’t control. Essentially, the aim is to avoid silos and enable efficient connectivity between CBDC systems.
One global blockchain is the answer
These trials indicate that SWIFT recognizes the need for a growing number of distributed ledger technologies (DLTs) and CBDC systems to communicate and interoperate. However, there’s another solution: one global blockchain with unbounded scaling on which all systems can operate.
The reason so many DLTs and separate systems exist is that, so far, no public blockchain has emerged that can handle the transaction throughput required to handle global commerce. The original Bitcoin protocol could handle such throughput, but due to alterations made by developers in subsequent years, its capacity was diminished.
Satoshi Nakamoto was absolutely clear in his communications: Bitcoin “never really hits a scale ceiling.” Upon release, he believed it could handle more transactions than Visa (NASDAQ: V). He was right, as the BSV blockchain today proves.
Unbounded scaling eliminates the need for multiple ledgers
BSV, which follows the Bitcoin white paper and implements Bitcoin in the closest way possible to what Nakamoto released, has already scaled past 100,000 transactions per second. With Teranode in the works, it will handle one million transactions per second with ease.
The BSV blockchain can also handle all manner of transactions, including those involving data such as invoices, bills of lading, and more. The OPCODES programmed into Bitcoin made these transactions possible, and they have been restored in BSV.
While banking behemoths like SWIFT will be keen to maintain their position in global money transmission, one global ledger is the solution to all the interoperability and communication problems they have identified and tried to solve. CBDCs and other
tokenized assets can be issued and run on the BSV blockchain.
All private ledgers reintroduce the problems of the old system: they are controlled by their respective owners, meaning they can alter them. They require additional solutions, such as bridges and messaging systems to communicate, which introduce security vulnerabilities. They also defeat the purpose of public ledgers, such as complete transparency and auditability, to begin with.
All trials and sandboxes are worthy, and the lessons derived from them are important. However, the ultimate lesson is yet to come: a multi-chain world is pointless. For blockchain technology to be truly beneficial, everything must run on one global chain. Only the BSV blockchain can scale to meet the demand.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: CBDCs are more than just digital money
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
