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On September 23rd, a pilot project involving four Asian Central Bank Digital Currencies (CBDCs) with real value trading was completed. according to In a post on LinkedIn by Daniel Aidan, an adviser to the Bank for International Settlements (BIS).
The pilot project, titled the mBridge project (also known as Multiple CBDC or mCBDC), will cross borders worth $22 million in real value between the Hong Kong Monetary Authority (HKMA) and the central banks of Thailand, China and the United Arab Emirates. facilitated cross-border transactions. Emirates, BIS and 20 commercial banks in these regions.
mBridge is part of the Inthanon-LionRock Phase 2 project, which is also experimenting with a proper governance model with jurisdiction-specific regulations. Furthermore, we aimed to design a new cross-border payment system that would solve the current pain points of banks such as high cost, low speed and operational complexity.
The mBridge project was first launched in September 2019 between HKMA, Bank of Thailand (BoT) and BIS. The first phase was completed in January 2020, enabling peer-to-peer fund transfers and foreign exchange trading.
The second phase of the project will be completed in September 2021. We explored distributed ledger (DLT) technology to facilitate real-time cross-border payments between two jurisdictions.
The completion of Phase 2 marked support for more currencies and interfacing with payment systems across multiple jurisdictions. These were achieved on top of the cross-border corridor network prototype built in the previous phase.
Phase 2 also allowed multiple central banks to explore a DLT cross-border payment system that could issue and distribute their own CBDCs. Participants can make peer-to-peer payments and claim their CBDC as a reserve at the issuing central bank.
Meanwhile, the existing commercial banking network, which operates 24/7, can now perform international remittances and foreign exchange operations in seconds, instead of taking days on average. DLT process could cut costs of cross-border payments in half, according to BIS report It was published September 2021.
BIS added that it will publish a detailed report on the project in October 2022. According to Eidan, this information will document Phase 3’s results, its design choices, technology trade-offs, and the future roadmap from Phase 1’s prototype to public release. – Source, production ready system.
