The Bank for International Settlements (BIS) announced on Tuesday that a multi-jurisdictional CBDC pilot led by the BIS Innovation Hub has been successful. The project saw 164 transactions worth nearly $22 million in real-value cross-border payments using a purpose-built multi-CBDC platform: mBridge.
Apart from the central banks of Hong Kong, China, Thailand and the United Arab Emirates (UAE), 20 commercial banks also participated in the project, which lasted just over a month.
Multi-CBDC cross-border payments
The four participating central banks issued more than $12 million in official digital assets (CBDC) on the test platform, BIS said in a Linkedin post.
“It took place from August 15 to September 23 at the mBridge Ledger, a custom-built program. #DLT platform The 20 participating commercial banks used the platform to settle different types of payments for corporate clients, focusing on cross-border trade. More than $12 million in value was issued on the platform facilitating more than 160 cross-border payments and currency transactions with a total value of more than $22 million,” the post said.
BIS has committed to publishing a detailed report covering the technical design, legal, policy and other regulatory aspects of its mBridge project during the Hong Kong Fintech (31 October to 4 November 2022) . The Swiss-based central banker will also reveal a roadmap for the new development.
Bank of Thailand’s Tayo Tunyathon K, who was part of the project, called it the world’s first pilot using real-value CBDC for cross-border trade settlements. In her Linkedin post, she said, “Proud to have been part of the work team to make this historic milestone! We are just beginning to see the possibilities of CBDC to bridge borders and facilitate economic and commercial growth.”
90% of central banks exploring CBDC options
A May 2022 BIS survey revealed that 73 out of 81 central banks are exploring ways to launch CBDCs, and 50% of them are already developing or experimenting with them. The paper further noted that central banks believe that CBDCs can alleviate key points such as limited operating hours and lengthy payment procedures.
In June, Swedish central banker Cecilia Skingsley, who had planned to take over as head of the BIS Innovation Hub in September, said at the European Central Bank (ECB) Forum on Central Banking that CBDCs are the natural evolution of the fiat money system and cash is on the way.
“I see it as an evolution of the role of the central bank, rather than a revolution… I think cash will disappear as a payment method, that’s for sure,” he said at the ECB event in Sintra, Portugal.
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