Interbank Communication

Definition ∞ Interbank communication refers to the exchange of information and transaction data between different financial institutions. This process is fundamental to the global financial system, enabling cross-bank payments, settlements, and information sharing for various financial services. Traditionally, this has relied on established networks like SWIFT, which can be slow and costly. Blockchain technology and digital assets offer new avenues for improving the speed, security, and cost-efficiency of these critical financial interactions.
Context ∞ Interbank communication is a significant area where traditional finance is exploring the potential of blockchain and digital ledger technologies, often featured in news about central bank digital currencies CBDCs and wholesale payment systems. A key debate involves balancing the innovative potential of distributed ledgers with the stringent regulatory and security requirements of existing financial infrastructures. Future developments anticipate a hybrid approach, where blockchain solutions may complement or gradually replace parts of legacy interbank communication systems.