SWIFT Formulates a Global Central Bank Digital Currency: The Digital Currency Arms Race is Accelerated

On the 5th of October, Society for Worldwide Interbank Financial Telecommunication (SWIFT) officially announced the results of a Central Bank Digital Currency (CBDC) test trial for cross-border payments. The participants of this test involved several central banks and 14 global institutions and commercial banks aimed at studying how to use CBDCs internationally and even convert to fiat currency when needed. On the 28th of September, China's first e-Yuan cross-border payment and settlement project — “the Currency Bridge” — has been undertaken. The digital currency arms race is accelerating.

Analysis and assessment

SWIFT is planning an online Global Central Bank Digital Currency.
Financial Associated Press on the 9th of October. SWIFT the 5th of October officially announced the outcome of a test to use CBDCs to make international charges. After an 8-month trial with different technologies and money, the agency announced the creation of a global central bank digital currency network with participants that include many countries' central banks and global retail banks, and 14 institutions. All this is aimed at studying the usage of Central Bank Digital currencies internationally. With the international situation getting worse, the growing importance of financial security is made more apparent. The increasingly tense situation in Russia and Ukraine is expected to further boost the development of CIPS.

China's first cross-border e-Yuan payment and settlement project has just been launched.
On the 28th of September, through the “union of labor and farmers,” five state-owned banks participated in the launch of the e-Yuan cross-border payment plan called the Currency Bridge (m-CBCD Bridge).
For the first time, the platform successfully completed the trading trial involving 4 countries' central bank digital currencies. With 4 countries and 20 commercial banks, the platform was able to complete cross-border trade for customers.

The e-Yuan is becoming the basis for the next generation's payment method.
The e-Yuan innovation scheme is a tech revolution in finance. The entire financial ecosystem is being reconstructed, bringing long-term industrial expansion. In the long term its logical that the e-Yuan will become a new digital infrastructure and will be the payment base for the digital economy of the ‘14th five-year plan’ (since 1949 the Communist party plans for the future of their country by creating 5-year plans of which most policy decisions revolve around).
The application for consumers is just the beginning but usage for business and government is gradually being included.

Investment advice:
1) From the operational perspective of the e-Yuan ecosystem, the banking industry is welcoming a systematic transformation of its IT operations. It recommended paying attention to the tech companies profitably cooperating with the banks, particularly Yuxin Technology, Changing Technology, and Shenzhou Information. Other benefiting companies include Tianyang Technology, Beijing North, and Gao Weida for example.
2) When it comes to hardware wallets, financial equipment manufacturers will usher in large-scale opportunities. The beneficiaries include Chu Tianlong, You Boxun, Newland, Xin Guodu, Lakala, Radio, and Television Express, etc.
Some of the risks include macroeconomic downturn risk, core technological development falling short of expectations, and the risk of escalating, Sino-US trade frictions.

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