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

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582