In two publications today, financial news service SWIFT claimed that it has solved two of the most thorny problems digital assets must overcome if they are to revolutionize the way money moves: enabling the coming wave of digital assets to interact seamlessly and instantly Central bank currencies to cross borders and allow token trading and settlement across different platforms and make these digital assets interoperable with traditional ones on the same platforms.

Citing successful experiments in both areas, SWIFT said in an announcement on Wednesday (October 5) that it has “solved the significant challenge of interoperability in cross-border transactions by providing a bridge between different distributed ledger technology (DLT ) and existing payment systems, and digital payment systems allow currencies and assets to flow and interact seamlessly alongside their traditional counterparts.”

See also: SWIFT plans real-time role for next 50 years of cross-border payments

Which is a massive thing if the two systems work as advertised in the real world. Of course, “if” has been called the longest word in the English language, and with good reason.

There are still a large number of issues and competitors to overcome, most notably the stablecoins that are already stepping into the payments role — and have central banks and policymakers so frightened that they managed to merge CBDCs into one in two or two years top topic to make 3 years.

crypto competition

Another problem to be solved is how to play well with an ever-growing array of tokenized assets — not just cryptocurrencies, but stocks, bonds, and ultimately anything valuable, like real estate — and the distributed ledger platforms on which they move leaves.

Also read: 37% of businesses use blockchain, crypto for cross-border payments

Quite a few of the latter are aimed squarely at building a cheaper settlement system capable of handling real-time payments more efficiently than SWIFT.

“Digital currencies and tokens have tremendous potential to shape the way we will all pay and invest in the future,” said Tom Zschach, SWIFT’s Chief Innovation Officer. “But this potential can only be unlocked if the different approaches being explored have the ability to connect and work together.”

That sums up the problem well – but doesn’t really solve it. SWIFT’s response to blockchain-based newbies trying to build a mousetrap for better payments boils down to arguing that its legacy infrastructure is an asset rather than a hurdle.

Zschach cited “inclusivity and interoperability… key pillars of the financial ecosystem,” Zschach said, “SWIFT’s existing infrastructure can ensure that these benefits can be enjoyed by as many people as possible at the earliest possible time.”

Additionally, SWIFT said conflicting technologies, platforms and regulatory environments could create market inefficiencies. As a result, she wants to expand her role to tokenized assets, noting that “institutional investors are increasingly expecting access to all asset classes (both traditional and digital) owned by different service providers.”

CBDCs

It’s not just crypto and digital assets that SWIFT has to prove best in the real world. There are about 67 countries with interoperable real-time payment rails, and it needs to beat stablecoins like Circle’s USD Coin (USDC) and Tether’s USDT – which nearly 100 governments find so threatening they’re centrally building, planning, or at least studying bank-issued digital currency versions ( CBDC) of their fiat money.

On the CBDC front, the coming wave of digital currencies such as a digital yuan, a digital rupee and likely a digital euro, and a somewhat likely digital dollar have a core interoperability issue to overcome. CBDCs built on different platforms and technical standards face other issues, such as the possibility and legality of use outside of their country of origin and differences between wholesale and retail CBDCs.

In a new white paper titled “Connecting Digital Islands: CBDCs – Findings from SWIFT Experiments Linking CBDC Networks and Existing Payment Systems to Achieve Global Interoperability,” SWIFT said it has worked with Capgemini to successfully facilitate cross-platform transactions between digital assets based on JPMorgan Quorum and R3 Corda Private Blockchains and fiat-to-CBDC transactions between these two digital ledger platforms and real-time gross settlement systems.

This showed that blockchains “could be interconnected for cross-border payments via a single gateway” capable of “orchestrating all communications between networks,” SWIFT said.

Fourteen banks, including Banque de France, Deutsche Bundesbank, HSBC, Standard Chartered, UBS and Wells Fargo, are involved in further experiments to scale the system.

The solution, according to SWIFT, “can enable CBDC network operators at central banks to easily activate and integrate domestic CBDC networks with cross-border payments by introducing a connector gateway.”

See also: 48% of businesses are looking for improved cross-border payment solutions

But there is still a long way to go, and there are also many political obstacles to overcome as CBDCs face a variety of national control issues.

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