According to Michael Miebach. CEO of Mastercard, the SWIFT payment system is most likely on its way out. He predicts that it will be obsolete in five years. He made this statement at the Global Blockchain Business Council Conference in Switzerland on May 28th, 2022.
He made this statement in answer to a question posed by a moderator to the panelists. The other participants included Jennifer Lassiter ED of Digital Dollar Project, Jon Frost, senior economist from the BIS and others. Miebach was the lone dissenting voice about the payments network and his answer created quite a stir at the conference.
Why is this such a cause for concern? SWIFT or the Society for Worldwide Interbank Financial Telecommunication is an important tool which facilitates payments across borders. It is key for banks to send each other encrypted messages on money transfer details. SWIFT works with a network of 11,000 financial companies and institutions in 200 countries. It facilitates more than 45 million transactions a day.
Considering the scale of the network and its operations, Miebach’s statement was clearly a surprise for all participants. A statement was later issued by Mastercard to clarify that it was not intended as a black and white issue. Miebach intended to say the SWIFT operations are evolving with the times and it will not look the same in the future. With more functionalities being added, it will be more than a messaging system.
The SWIFT system also plans to use the capabilities offered by CBDCs to expand its offerings. It is a matter of wait and watch to see how the crypto market will evolve and how SWIFT will incorporate new features.