BIS Issues Updates on Technology Initiatives on Cross-Border Payments
BIS recently made a couple of announcements with respect to the planned and ongoing work in the area of financial technology. The BIS Innovation Hub and SWIFT launched a hackathon, inviting teams to build and showcase solutions that enhance cross-border payments. Three winning teams will showcase their solutions at the BIS Innovation Summit in March to a global audience, including key payments industry players and central bankers. Additionally, the BIS Innovation Hub announced that the central banks of China and United Arab Emirates joined the digital currency project for cross-border payments, also known as the Multiple CBDC (m-CBDC) Bridge.
The m-CBDC bridge initiative is run in partnership with the BIS Innovation Hub, HKMA and BOT. The aim of the project, which was initiated by HKMA and the BOT under the name Inthanon-LionRock and later renamed, is to propose solutions and concepts to alleviate the current pain points in making cross-border fund transfers; these include inefficiencies, high cost, and complex regulatory compliance. The initiative will further explore the capabilities of distributed ledger technology by developing a proof-of-concept (PoC) prototype to support real-time, cross-border foreign exchange payment-versus-payment transactions in multiple jurisdictions, operating 24/7. It will analyze business use cases in a cross-border context with both domestic and foreign currencies. The participating central banks will take into account the results of the PoC work to evaluate the feasibility of the m-CBDC bridge project for cross-border fund transfers, international trade settlement, and capital market transactions in their own jurisdictions. Following the joining of CBUAE and the Digital Currency Institute of PBC, the m-CBDC bridge project will further foster a conducive environment for more central banks in Asia as well as other regions to jointly study the potential of distributed ledger technology in enhancing the financial infrastructure for cross-border payments.
Related Links
- BIS Press Release on Hackathon
- BIS Press Release on m-CBDC Project
- CBUAE Press Release on m-CBDC Project (in Arabic)
- BOT Press Release (in Thai)
Keywords: International, Asia Pacific, Middle East and Africa, China, Thailand, Hong Kong, UAE, Banking, m-CBDC, Digital Currency, Proof of Concept, Distributed Ledger Technology, CBDC, CBUAE, HKMA, BOT, BIS
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