Connecting digital islands

Swift CBDC sandbox project

Results report
March 2023
Contents 1 The background 3
2 The sandbox project 4
3 The journey so far 5
4 The sandbox project 6
5 The sandbox infrastructure 7
6 The CBDC transactions 8
7 The findings 9
8 Conclusion and next steps 11
9 Annex 1: The transaction flows 12
10 Acknowledgments 14

2 Swift CBDC sandbox project - Results report

The background
There’s a drive towards In 2022, Swift demonstrated it can
CBDCs around the world, but interlink the world’s CBDCs and
fragmentation is a risk payment systems
Interest in Central Bank Digital As part of our strategy to deliver
Currencies (CBDCs) is gaining instant and frictionless cross-
momentum globally: over 110 border transactions, we have been
countries around the world are now investigating the role we can play
exploring digital currencies according in the global CBDC ecosystem for
to the Atlantic Council; and a recent some time. In 2021, we published a
survey by the OMFIF Digital Monetary white paper revealing the results of
Institute found that 24% of central our first round of experiments, which
banks will be ready to go live with a demonstrated how we could enable
digital currency in the next 1-2 years. interoperability between CBDC and
non-CBDC payment networks
But there’s a great deal of variation in using existing messaging and
We’ve developed how countries are approaching digital banking structures.
an important new currencies. Central banks are looking
to use this new type of money to Our 2022 experiments went much
interlinking CBDC solve different economic and social further, as we demonstrated an
solution capable of challenges, and are employing a wide important new interlinking CBDC
variety of technologies, standards and solution capable of connecting
connecting CBDC protocols in their implementations. CBDC networks and existing
networks and existing This could lead to continued payment systems for cross-border
fragmentation, which if not tackled transactions. Using a simulation
payment systems at the global level, leads to a risk that of our enhanced platform and
for cross-border businesses and consumers won’t an experimental connector, we
be able to exchange CBDCs across demonstrated that we could
transactions. borders, and the benefits of new interlink CBDC networks together at
technologies not being realised. the technical level – thereby enabling
the multi-CBDC Model 2 outlined by
the Bank for International
Settlements (BIS).

3 Swift CBDC sandbox project - Results report

The sandbox project
In this project, we deployed our The sandbox testing proved
CBDC solution into a sandbox 1 for successful
collaborative testing The results of the sandbox testing
Following the success of our 2022 indicated the potential and value
experiments, we deployed our of our CBDC interlinking solution
solution into a sandbox to undergo for central and commercial banks.
further testing by 18 central and It demonstrated that the solution
commercial banks – including the supports interoperability between
Banque de France, the Deutsche CBDCs and enables them to be used
Bundesbank, the Monetary Authority in simulated cross-border payments.
of Singapore, BNP Paribas, HSBC, Swift was able to confirm its initial
Intesa Sanpaolo, NatWest, the Royal assumptions about CBDC technology,
Bank of Canada, SMBC, Société implementation and transaction flows,
Générale, Standard Chartered, and with participants providing insights on
UBS. The participants were given everything from access models and
access to the sandbox over a 12-week intermediary roles to CBDC flows and
period where they were able to test, atomic settlement.
assess and provide feedback on our
experimental solution. The feedback we received from the
banks was very positive. Participants
Hosted by Kaleido, a blockchain and saw clear potential and value in
digital assets platform, the sandbox Swift’s plans to continue developing
The sandbox testing used two blockchain networks – its interlinking solution – and they
confirmed the value of Quorum and Corda – as well as a also welcomed the opportunity to
simulated RTGS network and was exchange knowledge with each other
our CBDC interlinking also capable of accommodating about factors to consider in CBDC
solution for central and both wholesale and retail CBDC design and implementations. Many
use cases. Participants were able of the sandbox participants are keen
commercial banks. to test transaction flows between to continue this collaboration with
the three simulated networks, with Swift – and we’re committed to driving
the findings discussed among the further innovation in this space.
group in fortnightly collaboration
sessions. During testing, participants Swift will now develop a beta
sent 183 payments in the sandbox version of our interlinking solution
environment, with 4,736 transactions Following the success of the sandbox
processed in total including test testing, we will now develop a beta
instance payments. version of our interlinking solution
that we will use for further testing by
central banks. In parallel, we will run a
second phase of the CBDC sandbox,
focusing on new use cases and
implementing additional functionalities
based on the feedback received
from this project. Ultimately, our
aim is to deliver a production-ready
solution that’s capable of supporting
instant and frictionless cross-border
payments using CBDCs.

Read on to learn more about Swift’s collaborative sandbox project, including the
detailed results, insights and findings from our testing, and our plans for the future.

1.
Throughout this report, the sandbox is described as a technical sandbox, rather than a regulatory sandbox.

4 Swift CBDC sandbox project - Results report

The journey so far CBDCs: Gathering momentum Connecting digital islands
Interest in Central Bank Digital Currencies As part of our strategy to deliver instant and
(CBDCs) has grown exponentially in recent frictionless cross-border transactions, Swift
years, with over 110 countries now exploring has been investigating the role it can play
a digital currency, according to the latest in the global CBDC ecosystem for several
Atlantic Council tracker. To date, 11 countries years. In 2021, we published the whitepaper
have fully launched a CBDC, and others are ‘Exploring central bank digital currencies:
in advanced phases of their developments. How they could work for international
According to the 2022 OMFIF Digital payments, setting out the results of our first
Monetary Institute Future of Payments survey, round of experiments. This work showed how
24% of central banks expect to introduce Swift could enable interoperability and, in
a CBDC within the next 1-2 years. Recent doing so, demonstrated how we could solve
developments, such as the digital pound for the Bank for International Settlement
consultation launched in the UK, and the (BIS) multi-CBDC Model 1 of enhanced
Bank of Japan’s decision to move to a CBDC compatibility. This first round of experiments
pilot, point towards an intensification of - together with other multi-CBDC projects
24% of central activity globally. by the BIS Innovation Hub, The Monetary
Authority of Singapore, and others - have
banks expect to Whilst the momentum towards CBDCs is provided valuable insight to inspire the next
introduce a CBDC gathering pace, there remains a significant phase of our work.
risk of fragmentation at the global level.
within the next Central banks are developing their Our 2022 experiments went much further,
1-2 years own digital currencies seeking to solve demonstrating an important new interlinking
different use cases, whilst using different solution capable of connecting CBDC
technologies, standards, and protocols in networks and existing payments systems for
their implementations. If such fragmentation cross-border transactions. Our teams were
persists, it could lead to unconnected ‘digital able to build a simulation of Swift’s enhanced
islands’ springing up around the world, with platform and an experimental connector that,
as a potential consequence barriers to when combined, are capable of linking CBDC
businesses and consumers attempting to networks together at the technical level, and
make international payments using CBDCs. thus solving for the BIS multi-CBDC Model 2
(see Figure 1 for the high-level architecture
of our experiments). You can find out more
about our 2022 experiments here.
Figure 1: The Swift CBDC experimental interlinking solution

CBDC-A CBDC-B RTGS

Bank A Intermediary B Bank A

Swift CBDC Swift CBDC

connector connector

Intermediary A
ISO ISO
20022 20022
Bank B Intermediary A

Regulator Regulator
Node Node
ISO
20022

Swift's enhanced platform

Workflow Engine Routing Error Handling

Swift has connected global payments are used to make cross-border payments.
systems and currencies for over forty years. Now we are collaborating with our global
With our CBDC solution, we intend that community to develop a beta version of the
Swift can continue to play this role in a world solution to interlink CBDCs that are starting
where both digital and traditional currencies to go live around the world.

5 Swift CBDC sandbox project - Results report

The sandbox project As part of our commitment to collaborative innovation,
we deployed our CBDC infrastructure into a sandbox,
and opened up access to select Swift members
for experimentation with us. Enabled by Kaleido, a
blockchain and digital assets platform, and leveraging
Hyperledger FireFly, the sandbox provided an
environment for financial institutions to collaborate,
Figure 2: Named participants by country*
explore, assess, and improve our experimental CBDC
interlinking solution – as well as to define the next
Canada Italy
Royal Bank of Intesa San Paolo generation of supported payment flows and use cases.
Canada
Japan
In total, 18 institutions from across the globe The testing phase spanned 12 weeks during
France SMBC
participated in the CBDC sandbox. The which participants had continuous access
Banque de
participants were made up of a range of to the sandbox environment. Dedicated
France Singapore
central banks, market infrastructures and ‘collaboration sessions’ were held every
Société Générale Monetary
commercial banks – including the Banque two weeks in which representatives from all
BNP Paribas Authority of
de France, the Deutsche Bundesbank, institutions met to discuss their feedback as
Singapore
the Monetary Authority of Singapore, BNP a group. During these sessions, participants
Germany
Paribas, HSBC, Intesa Sanpaolo, NatWest, reviewed key elements of the experimental
Deutsche Switzerland
the Royal Bank of Canada, SMBC, Société interlinking solution, such as the Swift
Bundesbank UBS
Générale, Standard Chartered, and UBS. In CBDC connector and flows, roles and
parallel, we also ran an ‘observer series’ in responsibilities within the network,
Hong Kong UK
which four additional central banks provided technical and implementation considerations,
HSBC NatWest
input and feedback on the solution, without identity, privacy considerations, etc (see
Standard
having direct access to the sandbox itself. Figure 3 for session agendas). Participants
Chartered
were asked to test certain scenarios or
validate assumptions ahead of the next
*Participants listed here agreed to be named group meeting.
publicly

Figure 3: The sandbox project session agendas

1 2 3 4 5 6

Kick off Swift: An overview CBDC roles & CBDC Open Wrap up, review,
Attendees: Admin, of the sandbox responsibilities implementation considerations: avenues for future
Business Users, Technical project Attendees: Admin, & technical Identity & privacy exploration
Users
Attendees: Business Business Users, Technical considerations Attendees: Admin, Attendees: Admin,
Objectives: Kick off the Users, Technical Users Users Business Users, Technical Business Users, Technical
Attendees: Admin.
pilot and provide context, Objectives: Identify the Users Users
Objectives: Explore the Business Users, Technical
purpose, and high-level roles and responsibilities
connector and flows in Users Objectives: Review Objectives: Cover
goals of the Swift CBDC of the participants within
depth to ensure alignment Objectives: Capture and explore identity, any other outstanding
Interlinking experiment a CBDC network.
for future experiments. insights from banks access, and privacy topics. Swift to review
and CBDC sandbox.
around technical considerations for CBDCs. and present back key
implementation of a takeaways learned. Future
CBDC and whether it is areas of exploration
compatible with the Swift to be discussed and
connector proposal. considered.

6 Swift CBDC sandbox project - Results report

 The sandbox offered a technical CBDCs – and a simulated Real-Time Gross
The sandbox infrastructure infrastructure hosted on Amazon Web Settlement (RTGS) network. Incorporated in
Services (AWS) capable of testing each network were the required regulator
CBDC transactions between different nodes, the bank nodes, as well as our
networks. As such, the sandbox hosted experimental Swift CBDC connector which
two blockchain networks – Quorum and connected to a simulation of Swift’s
Corda, as representative distributed ledger enhanced platform.
technologies (DLTs) that could be used to run

Figure 4: A high-level component view of the Swift CBDC sandbox

Bank UI Portal
Bank Payment Engine
Bank Node Listener Service

Quorum r3 Corda RTGS

Regulator Node CBDC connector CBDC connector Regulator Node

Bank 1 Bank 2 Bank 1 Bank 2

Node Node Node Node

CBDC Pilot
Swift’s enhanced platform
Network

Swift experimental CBDC connector: The key components

Network Authority and network, which is a physical global tracker of the status CBDC message format into
Regulator Node: The CBDC entity on the network to which of a transaction in the CBDC the corresponding ISO 20022
experiments and design of the Swift CBDC connector will network. messages and vice-versa.
the Swift CBDC connector be connected.
introduces an administration Rulebook processor: The CBDC access server: An API
role within the CBDC network Cross-border message business rule processing endpoint is implemented by
called the “Network Authority”. identifier: The cross- engine subjects messages the network authority and
The entity (or entities) playing border message identifier to validation according to the is required to complete the
this role are considered is a component that rules defined by the network processing of the message
to be the administrator sends messages that are authority. Based on the results within the CBDC network. The
of the network and are identified as destined for of the evaluation, the network network authority sets rules
responsible for designing and external networks based authority can configure the in a business rule processor
implementing various aspects on the scheme defined by Swift CBDC connector to engine that invokes the
of the CBDC network. During the network authority for execute the appropriate API appropriate API in the API
live implementation of CBDC identifying cross-border exposed in the API server. server. As envisaged, the
networks, depending on their messages. This component: network authority could be
policies, CBDC authorities may a) sends the messages Message Translator: A tool operated by a relevant central
choose to implement this role intended for external networks provided to the network bank (or central bank system)
differently. This role of Network to the Swift CBDC connector; authority to map message or other designated payment
Authority contrasts with the and b) uses the Swift CBDC translation from one format to network operators or entities.
Regulator Node within the connector to inform the another. It translates the native

7 Swift CBDC sandbox project - Results report

The CBDC transactions Network Transaction Transactions Processed

Quorum Corda 98

Corda Quorum 58

RTGS Corda 27

Test Instance Payments 4,736

Participants were able to test transaction The Swift CBDC connector on each CBDC
flows between three different simulated network acted as the bridge to connect to
networks: 1) Quorum-to-Corda; 2) Corda- other payment systems via Swift’s enhanced
to-Quorum; 3) RTGS-to-Corda. See Annex 1 platform. The Swift CBDC connector
for diagrams of the flows. During testing, a implemented the local message processing
total of 4,736 transactions were processed and CBDC network accessing logic. This
throughout the networks (including test approach removed the need for each
payments), whilst 183 of these transactions participant, or Swift’s enhanced platform,
were sent by participants in the sandbox to know how to process the message and
environment. access the destination network.

The flows used the ISO 20022 pacs.008 To support atomicity, as well as the
message to initiate a payment, and the settlement process, the solution supports the
pacs.002 message to communicate creation of a conditional payment, through
acknowledgements between the various which the funds were escrowed in each of
financial institutions involved in the payment. the network prior to settlement. While our
To ensure non-repudiation and digital solution is flexible to meet most escrowing
integrity, all messages were digitally signed situations, for the demonstration purposes
using Swift’s unique Public Key Infrastructure we limited our implementation to: 1) escrow
(PKI). By leveraging the ISO 20022 standard on receiving side only; and 2) escrowing on
– as well as the widely used Swift PKI – both sending and receiving side.
we were able to ensure interoperability
between various networks operating using To enable this, and to ensure that the
different technologies. atomic settlement implemented follows the
traditional settlement process, a ReleaseFund
One of our key assumptions was that mechanism was used. This required a
CBDC tokens will remain within their own settlement instruction in the form of pacs.002
jurisdictions or monetary zones. So, in order message initiated by the intermediary;
to facilitate cross-border fund transfer under the Swift CBDC connector on the local
these restrictions, an intermediary model was network then orchestrates the release of the
used to demonstrate funds transfer between escrowed Fund.
two CBDC networks.

Swift CBDC connector

Figure 5: A high-level component view of the CBDC

Swift CBDC connector
x-border
Bank A
message
handler
CBDC Access Server

Swift CBDC Swift

x-border connector Platform
message
Interface
identifier
Intermediary A

Rulebook Message
Regulator
Processor Translator
Node

Provided by Network Authority

Provided by Swift

8 Swift CBDC sandbox project - Results report

The findings Overall, the results of the sandbox testing found that
Swift’s experimental interlinking solution can meet the
needs of central and commercial banks for CBDCs
interoperability, ensuring CBDCs can be successfully
used in cross-border payments. Furthermore, there was
a strong degree of alignment between the sandbox
participants as to how CBDCs are likely to function in the
future, providing greater confidence to Swift around the
design of the solution.
Through the interactive collaboration would require a permissioned network.
sessions, participants provided valuable And, importantly, despite potentially diverse
input for Swift to consider as we build the CBDC implementations, no concerns were
next beta version of the CBDC interlinking expressed by participants with regards to
solution. The range and diversity of the connecting with Swift’s CBDC connector or
technical feedback received will enable us to its orchestration requirements – opening
to iterate our solution to better meet the up the opportunity to enable an efficient and
needs of multiple CBDC design types and scalable ‘hub and spoke’ model that can
implementations. leverage known standards and practices.

CBDC access models and Whilst the sandbox simulated CBDC

intermediary roles networks using the DLT technologies Corda
and Quorum, some participants are using
The sandbox participants shared their
proprietary technologies and non-DLT
considerations regarding access models for
technologies to build their CBDC networks.
a CBDC network, affirming the expectation
A number of participants are also exploring
that CBDC tokens would likely remain within
further private/permissioned DLT’s such as
their own jurisdictions. Participants expected
Hyperledger Fabric in particular and Swift
CBDC networks to follow the access models
will look to support this technology, along
of current domestic payment networks,
with other proprietary and centralised
with no assumed extension of access to
architectures, in the future development of
foreign payment service providers. Given
the solution.
these conditions, intermediaries are likely to
continue to be commonly used to facilitate
cross-border CBDC transactions, with the
CBDC flows and messaging
potential to evolve the current correspondent standards
banking model. The participants agreed that the ISO 20022
standard, currently being adopted for non-
The testing showed It was widely discussed that from an CBDC payments, could be appropriately
that our solution operational model perspective, it could
make sense to build on current structures,
reused as a language for cross-border
payments with CBDCs, including the use of
can meet the such as nostro/vostro accounts of pacs.008 and pacs.002 messages. Whilst
interoperability intermediaries at the settlement level. Whilst
alternatives may be available, such as central
the sandbox currently uses these messages
to create a payment flow, some participants
needs of central and bank swap lines, these are typically not used requested that other message types be
commercial banks today for daily operational purposes, and so
the design of alternative mechanisms still
supported going forward, such as pacs.004,
camt.052/053, camt.054, camt.029 and
needs to be assessed. camt.057. There were contrasting views
among participants as to whether serial and
CBDC implementation and cover payment flows would be required,
technology selection and whether atomic settlement could apply
within these flows. Some thought both
Participants agreed that CBDC networks
flow types would be needed, others only
could be implemented using permissioned
considered serial payment flow necessary,
DLTs or centralised architectures, due to
whilst another group believed neither would
ongoing privacy and regulatory concerns
be required in the future CBDC cross-border
with Public DLT implementations. With
model. This will continue to be assessed
this in mind, Swift was able to confirm
with the community as we progress further
the feasibility of hosting a cross-border
future exploration.
message identifier on the network, which

9 Swift CBDC sandbox project - Results report

 Atomic settlement synchronicity should be ensured between
the off and on-chain movements. It was
We previously explored the use of Hash Time
suggested that CLS would continue be
Lock Contracts (HTLC) for atomic settlement
used for FX settlement; however, with
in our 2021 experiments. However, for the
CLS settlement coverage applying to 18
reasons outlined in our October
currencies, there is also the potential to
report, we proposed the use of an alternative
explore addressing settlement for non-CLS
new ReleaseFund mechanism for our 2022
settled currencies.
solution, described above.

Participants asked us to consider Identity and privacy

implementing a further enhanced atomicity In our implementation, Swift PKI signatures
scheme, whereby the solution orchestrates were applied by the initiating institution on
simultaneous atomic settlement between the pacs. message, and were subsequently
the participating networks. Thanks to the added to the CBDC network. Whilst this
orchestration capability of our enhanced was acceptable for most participants, some
platform, we can further develop the solution requested Swift to consider applying the PKI
to enable the escrow fund to be orchestrated signature at the Swift CBDC connector, as
simultaneously; as such, the Swift platform well as reusing the PKI key implemented in
will know the escrow condition of the the local network.
transaction. When atomicity is required, the
Swift platform will request the intermediaries The use of Personally Identifiable Information
to initiate the ReleaseFund request. (PII) in payment messages was highlighted
Once all intermediaries have submitted as an important area for consideration, for
the ReleaseFund requests, they will be example in Singapore’s context with the
simultaneously released to all the CBDC Personal Data Protection Act (PDPA). In
connectors involved for the escrowed fund cases where PII is included in an ISO
to be released. As a result, this enhancement message, then it is the responsibility of
can increase the level of atomicity. the network authority to ensure adequate
security measures are taken to protect that
Liquidity information within their network.
The topic of liquidity management was
Careful consideration should be given by
heavily discussed by sandbox participants.
authorities in deciding whether a message
There were diverse opinions as to the overall
containing PII should be stored in their
net impact of a CBDC on the efficiency of
CBDC network. In cases where it is decided
liquidity management. Some participants felt
that PII should not be stored in network, it
that there could be a material reduction in
Swift’s initial the time to process and complete a cross-
would be possible to store a hash of the
assumptions about border payment and therefore liquidity costs
message, then send the message securely
via out-of-band channels such as API. This
could also be reduced through lower duration
CBDC implementations of holding liquidity. A countervailing factor
was demonstrated in the CBDC sandbox’s
were largely validated however could be the potential fragmentation
Quorum network leveraging Hyperledger
FireFly’s private messaging capabilities.
of liquidity between existing forms of fiat
by the sandbox currencies and CBDCs, depending on level
However, this assumes both that the network
participants. of fungibility. Furthermore, faster transaction
is using a DLT technology that supports
such capabilities, and that the DLT’s internal
speed combined with gross settlement
secure message exchange is not adequate
could reduce the efficiency of liquidity
or is too complex to implement. It still needs
management if netting mechanisms were
to be determined how interoperability
not available for CBDC transactions. We will
between CBDC networks can be ensured if
work with participants to assess whether
no PII is stored in the respective network and
some level of liquidity management
a DLT is not used.
research can be scoped in the next phase
to enhance the understanding of liquidity
impacts and mitigations. Support for value-added services
Finally, some participants requested that
Foreign exchange the solution be enhanced to leverage more
value-added services already offered by
In-depth discussions also took place around
Swift, such as sanctions screening, Anti-
FX settlement, and if this would happen
Money Laundering (AML), payments pre-
within the payment flow or not. Many
validation, and exception handling. Moving
participants thought an out of network
forward, we will look to enhance our offering
approach to FX settlement would be likely,
based on these requests.
given current market structures. If FX
settlement were to happen, off or on-chain,
a further suggestion was to ensure that

10 Swift CBDC sandbox project - Results report

Conclusion and next steps The overall feedback we received during the course
of the sandbox project was very positive, with the
participants seeing clear potential and value in Swift’s
experimental CBDC interlinking solution, and in its further
development. The participants also found value in being
able to engage with other central and commercial
banks to exchange knowledge and share views about
important design considerations for CBDCs. Many
participants were keen to continue their collaboration
with Swift as we iterate our solution into a beta version,
with a particular focus on extending interoperability
capabilities and testing further use cases.
The sandbox feedback confirmed the What’s next?
Many participants importance of considering interoperability for
cross-border as well as domestic payments
With a growing momentum towards
were keen to continue at the design stages of a CBDC i.e., to
CBDCs, and digital assets more broadly,
we are committed to continuing to drive
their collaboration mitigate potential global fragmentation by
‘building it in’ from the start. Participants also
collaborative innovation in this space.
with Swift as we emphasised the desire to extend the scope
Specifically, we now intend over the coming
months to:
iterate our solution into of the industry vision for interoperability
between existing RTGS systems, faster
a beta version. payments systems and market infrastructure
1. Develop the CBDC interlinking solution into
a beta version for payments with enhanced
interlinking initiatives. It was thought that
atomicity, that can be tested further by
this would support the industry to achieve
central banks, considering security and
full interoperability between existing and
other requirements.
new forms of payment.
2. Run a second phase of the CBDC sandbox,
In terms of further use cases, participants
focused on new use cases, in order to
cited that Delivery-versus-Payment (DvP)
enable the Swift community to further
and more sophisticated Payment-versus-
collaborate and test with each other, and
Payment (PvP) mechanisms would be
so contribute to the next generation of
highly relevant and identified potential use
CBDC solutions.
cases in securities settlement, trade finance
and conditional payments. Participants
As a result, we hope to develop a genuinely
indicated that to further explore DvP, we
useful solution, capable of supporting instant
should leverage existing progress that
and frictionless cross-border payments using
has been made in the developments of
CBDCs, and, in doing so, enable the financial
the tokenisation of assets more widely
industry to realise the benefits of new forms
(such as token creation, de-tokenisation,
of digital currencies across the globe.
collateralisation and reconciliation), topics
that Swift explored in parallel experiments
published in October 2022. In such cases,
the solution would need to be generic to
both the underlying asset and the
technology implemented.

Want to learn more?

To provide feedback, or if you would like
to learn more about our tokenised assets
experiments and solutions, please reach
out to your Swift account manager or
contact innovate@swift.com.

11 Swift CBDC sandbox project - Results report

Annex 1: The transaction flows

Figure 6: Quorum to Corda Flow

Debtor Bank Regulator Intermediary CBDC Swift CBDC Intermediary Regulator Bank Creditor
Corp A Node A connector platform connector B Node B Corp

Payment
initiation Pacs. 008 (DLT Format)
Credit transfer

Payment
Status UETR, ISO Message Pacs. 008 (DLT Format)
(DLT format) sent/picked Credit transfer
by the Regulator Node and
passed to the Swift connector
Escrow funds

Pacs. 008 (DLT Format)

Pac.002 escrow ack

UETR,
Settle with
Intermediary

Instruct to settle UETR

UETR, ReleaseFund Funds released Credit Fund

to Bank B

UETR, Complete Status UETR, Complete Status

Figure 7: RTGS to Corda Flow

Debtor Bank Intermediary Swift CBDC Intermediary Regulator Bank Creditor

Corp A A platform connector B Node B Corp

Payment Pacs. 008

initiation Credit transfer

Pacs. 008 Pacs. 008

Credit transfer (DLT Format)
Payment
Notification
Status

Escrow funds

Pacs.008 (DLT Format)

Pacs.002 escrow ack

UETR, Instruct to
settle with settle UETR
intermediary

UETR ReleaseFund
Funds released Credit Fund
to Bank B

12 Swift CBDC sandbox project - Results report

Figure 8: Conditional Payments Flow

Bank A Regulator Bank B Bank C Regulator Bank D

node node

1
3
1 5
4 Smart Contract
Smart Contract 2
Swift's
Swift CBDC

Swift CBDC
connector

connector
enhanced
platform
Escrowed Escrowed
Funds Funds

1 Funds Escrowed 3 Funds Released 5 Funds Released

2 Release Fund/Signed UETR 4 Release Fund/Signed UETR

13 Swift CBDC sandbox project - Results report

 Swift would like to give a special thanks to
Acknowledgments Swift Team the 110+ colleagues from the 18 central and
commercial banks that participated in this
Tom Zschach
sandbox project.
Chief Innovation Officer

Nick Kerigan
Managing Director, Head of Innovation

Rachel Levi
Head of Innovation Engineering

Giri Krishnapillai
Innovation & Architecture

Kaleb Fry
Product Strategy & Innovation

Travis Moe
Senior Innovation Engineer

Mike Ninov
Innovation Engineer

14 Swift CBDC sandbox project - Results report

About Swift
Swift is a global member-owned cooperative
and the world’s leading provider of secure
financial messaging services. We provide our
community with a platform for messaging,
standards for communicating and we offer
products and services to facilitate access
and integration; identification, analysis and
financial crime compliance. Our messaging
platform, products and services connect
more than 11,000 banking and securities
organisations, market infrastructures and
corporate customers in more than 200
countries and territories, enabling them
to communicate securely and exchange
standardised financial messages in a
reliable way.

As their trusted provider, we facilitate global

and local financial flows, support trade
and commerce all around the world; we
relentlessly pursue operational excellence
and continually seek ways to lower costs,
reduce risks and eliminate operational
inefficiencies. Headquartered in Belgium,
Swift’s international governance and
oversight reinforces the neutral, global
character of its cooperative structure. Swift’s
global office network ensures an active
presence in all the major financial centres.

For more information, visit

Web: www.swift.com
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