digital currency: cross-border digital currency can speed up transfer, pilot shows

0


A cross-border digital currency experiment supported by the Bank for International Settlements and four central banks shows that e-cash can lead to faster and cheaper global money transfers.

The multi-central bank digital currency bridge (mBridge) project, in which the monetary authorities of Hong Kong, Thailand, China and the United Arab Emirates are partnering, has produced a prototype that reduces the time for international transfers to a few seconds compared to a few days with the use of the traditional correspondent. banking, according to a BIS report on Tuesday.

The prototype, built on Ethereum’s Hyperledger Besu blockchain, shows that distributed ledger technology can help cut the cost of cross-border transactions in half, according to the report. The mBridge team will address legal, policy, governance and business issues in developing a production-ready digital currency solution, according to the report.



“Allowing faster and cheaper cross-border wholesale payments, including to jurisdictions that do not benefit from a vibrant correspondent banking system, would be positive for trade and economic development,” said Benedicte Nolens, head of the center Hong Kong’s BIS Innovation Hub, said in a statement.

Global central banks are rushing to develop their own versions of digital money. China is most advanced in its progress with the e-CNY, which has raised concerns that it threatens the international status of the US dollar. The People’s Bank of China has said the digital yuan will be used primarily domestically, although it is studying its cross-border use in Hong Kong.

Formerly known as the Inthanon-LionRock Project, the mBridge collaboration was first initiated by the Hong Kong Monetary Authority and the Bank of Thailand. Their joint research ended in 2020, after 10 banks in the two regions tested a settlement network model using distributed ledger technology.


Share.

Comments are closed.