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.

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.

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

Sunyang, a researcher at Suning Institute of finance, also pointed out that Swift is signaling transmission mechanism and CIPS is a level matter. However, it is not a level thing with the central bank digital currency. DCEP is a cash, and the back-end payment liquidation still needs to have the support of the corresponding system, which can be swift or CIPS.

In fact, since 2012, China has started to build its own cross-border payment system CIPS, and has made great progress. It is better to accelerate the construction of CIPS in China than to expect the breakthrough of DC / EP in the field of cross-border payment. Li Lianxuan 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.