BIS Claims Success in Multi-CBD Cross Border Payments Pilot Project

The Bank for International Settlements (BIS) on Tuesday announced that a multi-jurisdictional CBDC pilot led by the BIS Innovation Hub has been successful. The project has seen 164 transactions worth nearly $22 million in real value cross-border payments through a purpose-built multi-CBDC platform – mBridge.

As part of the experiment, several central banks participated in the mBridge project, a multi-CBDC platform for international payments.

In addition to the central banks of Hong Kong, China, Thailand and the United Arab Emirates (UAE), 20 commercial banks are also involved in the more than month-long project.

Multi-CBDC Cross-Border Payments

More than $12 million in official digital assets (CBDCs) have been issued by the four central banks participating in the pilot platform, BIS said in a Linkedin post, BIS said.

“It takes place from August 15 to September 23 on mBridge Ledger, a custom-developed #DLT platform. The 20 participating commercial banks used the platform to settle different types of payments for corporate customers, with a focus on cross-border commerce. Over $12 million in value has been issued on the platform facilitating over 160 cross-border payments and foreign exchange transactions totaling over $22 million,” the post said.

BIS has promised to release a report detailing the technical design, legal, policy and other management aspects of its mBridge project during the Fintech in Hong Kong (October 31-December 31). November 4, 2022). The Swiss-based central bank will also reveal a roadmap for the new development.

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Tayo Tunyathon K from the Bank of Thailand, as part of the project, calls it the world’s first pilot to use real-value CBDCs for cross-border commercial settlements. In her Linkedin post, she said, “Proud to be part of the team that worked in creating this historic milestone! We are only just beginning to see the ability of CBDCs to bridge borders and facilitate economic/trade growth.”

90% of central banks explore CBDC options

A BIS survey in May 2022 found that 73 out of 81 central banks were looking to launch CBDCs, and 50% of them were developing or testing them. The article also points out that central banks believe CBDCs can ease key pain points such as limited operating hours and lengthy payment procedures.

In June, Swedish central banker Cecilia Skingsley, who is scheduled to take over as director of the BIS Innovation Center in September, said at the European Central Bank’s Central Banking Forum. (ECB) that the CBDC is the natural evolution of the fiat and cash systems being used.

“I see it as an evolution of the central bank role, not a revolution… I think cash will disappear as a payment method, that’s for sure,” she said at ECB event in Sintra, Portugal.

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