Featured Product

    BIS Report Highlights Potential of Multi-CBDC Platform Prototype

    September 28, 2021

    The Bank for International Settlements (BIS) published a report on a multiple central bank digital currencies (mCBDCs) platform for cross-border payments. The report is a joint effort by the BIS Innovation Hub Hong Kong, 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 (CBUAE). BIS and the four central banks developed a prototype of mCBDCs, which shows potential for reducing costs and speeding up cross-border payments. This cooperation is a part of the mBridge project, which shows that joining up national digital currencies in common interoperable platforms offer central banks a technological clean slate.

    The common prototype platform for mCBDC settlements was able to operate on a 24-7 basis and complete international transfers and foreign-exchange operations in seconds, as opposed to the several days normally required for any transaction to be completed using the existing network of commercial banks. The cost of such operations to users can be reduced by up to half, according to the report. The mBridge project builds on the initial investigation by the central banks of Hong Kong and Thailand (Project Inthanon-LionRock), which first proved the viability of a common CBDC platform between two jurisdictions, by testing critical features such as transaction privacy, foreign-exchange matching, monitoring, and compliance. The current phase of the project broadens the geographic and diversity of currencies and use cases, adding the Digital Currency Institute's experience with rolling out the e-CNY pilot in China and the learnings by CBUAE from developing a single-currency blockchain solution with Saudi Arabia (Project Aber). The report sets out the takeaways of Project Inthanon-LionRock Phase 2 and introduces the scope of the third phase.

    Phase 3 involves further experimentation with design choices and technology trade-offs and a future roadmap from prototype to a production-ready network that can serve the broader central banking community as a public good through open-sourcing. To achieve this, collaboration with the public and private sector will continue and trials will be conducted in a safe environment. Going forward, mBridge will continue to explore existing limitations of the current platform, related to privacy controls, liquidity management, and the scalability and performance of distributed ledger technology in handling large transaction volumes. In addition, the project pipeline will incorporate policy requirements and measures to ensure compliance with jurisdiction-specific regulations, along with testing and investigating appropriate governance models. The project's next phases are expected to include trials in a safe or controlled environment with commercial banks and other market participants. At present, the BIS Innovation Hub is working with ten central banks in different projects that investigate different uses of CBDCs (retail and wholesale), processes, and technologies.

     

    Related Links

    Keywords: International, Asia Pacific, Middle East and Africa, China, Hong Kong, Thailand, Saudi Arabia, Fintech, CBDC, Digital Currencies, Operational Risk, Cross-Border Payments, m-Bridge, Regtech, PBC, BIS

    Related Articles
    News

    EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR

    The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).

    January 20, 2022 WebPage Regulatory News
    News

    OSFI Issues Results of Pilot on Climate Risk Scenario Analysis

    The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.

    January 20, 2022 WebPage Regulatory News
    News

    ECB Issues Opinions on Green Bonds Standard and CRR Proposals

    The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.

    January 19, 2022 WebPage Regulatory News
    News

    ESRB Explores Policy Response to Risks Arising from Digitalization

    The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.

    January 18, 2022 WebPage Regulatory News
    News

    EU Authorities Address COVID-19 Reporting, MCD, and PSD2 Issues

    The European Banking Authority (EBA) announced that the guidelines on the reporting and disclosure of exposures subject to measures COVID-relief measures shall continue to apply until further notice.

    January 17, 2022 WebPage Regulatory News
    News

    FI Publishes Multiple Regulatory and Reporting Updates

    The Swedish Financial Supervisory Authority (FI) announced that the capital adequacy reporting as at December 31, 2021 must be done by February 11, 2022.

    January 17, 2022 WebPage Regulatory News
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7875