SWIFT vs CBDC Transaction

[Yugocean]

CBDCs are becoming ultimate competition for companies like SWIFT.

SWIFT - Acronym for "Society for Worldwide Interbank Financial Telecommunications", it is Belgian based financial messaging service.
CBDC - Acronym for "Central Bank Digital Currency", it is digital for of a country's national currency.

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Currently banks utilise the services like SWIFT to conduct international money transactions. On other side, to combat the growth of cryptocurrencies, CBDC is becoming a vital endeavour for national banks in practically every country on the planet.

SWIFT processes millions of messages per day, but transactions take several days to complete on its network. CBDC, as a digital form, will take short time to transact.

CBDC Will Close SWIFT
With regard to CBDCs, SWIFT will be unable to sustain its relevance. Michael Miebach, CEO of Mastercard, predicted during a recent Davos conference on CBDC that CBDC will wipe out organisations like SWIFT in as little as five years.

SWIFT needs to being changes to survive in new era.

 

[Mika]

CBDC will not close SWIFT.
First of all, you need to understand how SWIFT works. When someone from the US sends funds to a person in the UK, banks (sender's banks and receiver's banks) use a mediator called SWIFT. In this profess, actual money is not transferred. For example, when the sender sends USD from the US, his bank does not send the USD banknotes. The receiver in the UK will receive an equivalent amount in GBP. SWIFT performs this transaction electronically, only the amount in figures is credited to the receiver's bank account.
CBDC on the other hand is a currency created by the central bank by creating the fiat reserve. It is just a digital version of fiat money. Therefore, you will still need middlemen like SWIFT to make the transfer possible when someone from one country is sending CBDC to another country because CBDC used by the sender will be different from the CBDC in the receiver's country.

 

[Yugocean]

@Mika you have your point, but -

First of all, you need to understand how SWIFT works.

This one is unnecessary point.
MasterCard CEO himself made this comment in front of the crowd in Davos conference that companies like swift will be extinct in 5 years, he is more experienced to understand how these things work.

Also. Giving example of US and UK transaction isn't an experienced one from your side as you were neither from both countries. You should give example of your experience, an example on money exchange that could be compared to Michael Miebach.

How CBDC is going to work, this is still not what you mentioned, because CBDC don't exists like paper currency. But anything that depends on Block hain technology won't require SWIFT in present form, the company needs to bring change.
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