The Digital Curr cy Institute, the People’s Bank of China’s digital curr cy wing, and the c tral bank of the United Arab Emirates have joined other Asian monetary regulators in a c tral bank digital curr cy project that focuses on cross-border paym ts.
The project named multiCBCCBDC bridge was initiated by the Hong Kong Monetary AuthoriKMAHKMA) and the Bank of Thailand (BoT) and was later joined by the BIS Innovation Hub C BIS IHBISIH).
The consortium is developing a proof-of-concept (PoC) prototype exploring the capabilities of the distributed ledger technologies (DLT) in real-time cross-border foreign exchange paym t-versus-paym t transactions. The regulators want the system to work around the clock across multiCBCjurisdictions.
Additionally, the announcem t detailed that the participants will analyze business uses within a cross-border context with both domestic and foreign curr cies.
Digital Yuan for Settlem t?
Among all the participants in the c tral bank consortium, the Chinese monetary regulator is the only one piloting its digital curr cy.
Though Tuesday’s press release did not m tion anything of the role of digital yuan in building the cross-border paym ts system, the Hong Kong regulator was already in talks with the People’s Bank of China toCBCt the CBDC in cross-border paym ts.
Digital curr cy has massive pot tial in changing the curr t shortcomings of the cross-border paym t system, and many c tral banks are stressing this advantage. The consortium highlighted that the project can improve the ineffici cies, high cost and complex regulatory compliance in cross-border paym ts.
Furthermore, along with the monetary regulators, many private players are working in the cross-border paym ts ar a. San Francisco-based RipCBChas partnered with hundreds of banks and financial institutions around the world to build a massive network for cross-border paym ts using its infrastructure.