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China, Hong Kong, Thailand, UAE complete pilot for cross-border CBDC platform

Twenty banks across the countries used the mBridge platform to conduct 164 payment and foreign exchange transactions worth more than $22 million

October 27, 2022 / 10:11 AM IST
Representative image

Representative image

The Bank for International Settlements (BIS) along with the central banks of China, Hong Kong, Thailand and the United Arab Emirates has completed a successful pilot of the use of central bank digital currencies (CBDCs) by commercial banks for real-value transactions across borders.

Twenty banks across the countries used the mBridge platform to conduct 164 payment and foreign exchange transactions totalling more than $22 million over six weeks, the BIS said in a statement.

“Project mBridge envisions an efficient, low-cost, regulatory-compliant and scalable cross-border payment solution with CBDC at its core,” the BIS said. “The experiment was designed to operate across different jurisdictions and currencies, to explore the capabilities of distributed ledger technology and the application of CBDC in cross-border payments between commercial banks.”

The pilot advanced multi-CBDC experimentation by settling real value directly on the platform, the BIS added.

Countries across the world are exploring the launch of CBDCs as an alternative to private cryptocurrencies, a space that has been booming but is in the regulatory gray zone.

India, a global pioneer in digital payments, is also seeking to launch its own CBDC this year. The Reserve Bank of India will soon commence a pilot launch of its e-rupee for specific use cases.

The RBI has said that collaboration with stakeholders, including with BIS, on developing common global standards for facilitating easy cross-border transactions will be a way forward.

Also read: The e₹ is on the way as RBI gears up for a pilot launch of its own digital currency

The mBridge pilot will be presented at the Hong Kong Fintech Week due from October 31 to November 4, along with updates on Project Aurum (retail CBDC) and Genesis 2.0 (green finance).

The BIS also said that many jurisdictions in emerging and developing economies were losing access to the international network of correspondent banking services, leaving many households and firms without sufficient or affordable access to global payments systems.
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