Will the central banks digital currency impact the swift system?

category:Finance
 Will the central banks digital currency impact the swift system?


Will the central banks digital currency impact the swift system?

Wang Yongli, chief economist of Haiwang Group, pointed out that the introduction of digital currency and the change of operation mechanism of central banks in various countries will inevitably have a great impact on the existing international payment and settlement system including swift, and corresponding reform is needed to create a new regional and global collection and payment settlement system and mechanism to adapt to the operation of digital currency.

Hao Yi, a researcher at the Bank of China Research Institute, also believes that the central banks digital currency will impact the swift system. Compared with the existing electronic payment system, the digital currency of the central bank is a great improvement. On the one hand, in the field of cross-border settlement, the digital currency based on blockchain has improved the settlement time of existing swift from several days to seconds, greatly improving the settlement efficiency. On the other hand, it reduces the cost of cross-border transfer. Changes brought about by technological progress cannot be suppressed by political intervention. Therefore, once the central bank digital currency is widely used in cross-border settlement, it will have a great impact on the swift system.

However, Li Lianxuan pointed out that Swift is a multi currency message processing system, which is a telecommunication channel in the international settlement system, rather than a payment system.

He said that the current international settlement system consists of two parts: one is the cross-border clearing system of national currency dominated by various countries, such as chips of the United States and CIPS of China, and the other is the international payment and payment telecommunication operation system shared by all countries, such as swift. In actual operation, only when swift is connected with the cross-border clearing systems of various countries can cross-border payment be realized.

The central banks digital currency is essentially a payment system, so DC / EP cant replace swift at all, Li said.

Swift was established in May 1973 with a long history. Many financial institutions and large enterprises are members of swift. This kind of trust relationship is very difficult to be impacted, let alone DCEP, which is only in the research stage and has not yet developed. Sun Yang said.

Li Lianxuan believes that even CIPS system still needs to rely on swift. If China really wants to get rid of its reliance on swift, China needs to re develop a message processing system similar to swift. However, the key to the problem is that the message format of swift has become an international standard. Starting a new standard means setting up a new standard. How many countries are willing to use the standard is an important issue. However, he believes that at present, the Chinese peoples worry about swift seems a little redundant. Li Lianxuan said swift is an international cooperation organization, not a government department of a specific country. A countrys right to speak in international organizations depends on its comprehensive national strength and international influence. At present, as China has become the worlds second largest economy, China has become a more and more important business source of swift, which has been paid more and more attention. The United States can use its hegemony to sanction Iran, Venezuela and other countries through swift, but it is difficult to sanction China through swift. Source: surging news editor: Zhang Mei_ NF2100

Li Lianxuan believes that even CIPS system still needs to rely on swift. If China really wants to get rid of its reliance on swift, China needs to re develop a message processing system similar to swift. However, the key to the problem is that the message format of swift has become an international standard. Starting a new standard means setting up a new standard. How many countries are willing to use the standard is an important issue.

However, he believes that at present, the Chinese peoples worry about swift seems a little redundant.

Li Lianxuan said swift is an international cooperation organization, not a government department of a specific country. A countrys right to speak in international organizations depends on its comprehensive national strength and international influence. At present, as China has become the worlds second largest economy, China has become a more and more important business source of swift, which has been paid more and more attention. The United States can use its hegemony to sanction Iran, Venezuela and other countries through swift, but it is difficult to sanction China through swift.