The Bank for International Settlements (BIS) and four central banks have completed a pilot for the use of central bank digital currencies (CBDCs) by commercial banks for real-value transactions across borders.
The bank collaborated on the trial with the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China, and the Central Bank of the United Arab Emirates.
20 banks across the four jurisdictions used the multi CBDC platform for international payments to conduct 164 payments and foreign exchange transactions worth more than $22 million over six weeks, settled directly on the mBridge platform.
BIS said that the Project mBridge aims to create an efficient, low-cost, and regulatory-compliant cross-border payment solution with CBDC at the core.
It also hopes to address issues around emerging and developing economies, which the bank says are losing access to the international network of correspondent banking services.
It said that by enabling peer-to-peer and instant exchange of multiple CBDCs on a single network, the project could "solve long-standing inefficiencies in cross-border payments and foster greater financial inclusion".
“Financial exclusion is not just a problem for individuals; it is also affecting economies,” says Cecilia Skingsley, head of the BIS Innovation Hub. “This project makes important strides towards developing a platform that has the potential to foster more inclusive and efficient payments systems that will benefit those making and receiving payments in different currencies and jurisdictions as well as the overall functioning of the global financial system.”
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