Multi-CBDC prototype shows potential for reducing costs and speeding up cross-border payments (BIS)

Big news today - well big news if you are interested in central banking and digital currencies - with release of the #mBridge project report on the Multi-CBDC prototype which the Bank for International Settlements says has potential for reducing costs and speeding up cross-border payments.

In summary, the mBridge kicked off as an initial experimentation from the Hong Kong and Thailand central banks. The Bank of Thailand and the Hong Kong Monetary Authority (HKMA) were joined by the Digital Currency Institute of the People's Bank of China and the Central Bank of The UAE.

The BIS Innovation Hub found the platform to be an alternative to complexities and inefficiencies of the correspondent banking system and an enabler for the joining up national digital currencies in common interoperable platforms - all performed on a 'clean slate' - an attractive proposition of technology for central banks.

In the words of Benoît Cœuré, Head of the BIS Innovation Hub "The prototype is part of our efforts to design CBDC technology. The project includes experimenting with use cases and trials, balanced with analysis of governance, policy and legal considerations with a focus on cross-border use."

The report is about a prototype of multiple Central Bank Digital Currencies (known as 'mCBDCs') developed by the BIS Innovation Hub and the four central banks.  The report finds demonstrable evidence for the potential of using digital currencies and distributed ledger technology (DLT) to deliver real-time, cheaper and safer cross-border payments and settlements under the mBridge project.
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The common prototype platform for mCBDC settlements was able to 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 and operate in a 24/7 basis. The cost of such operations to users can also be reduced by up to half, according to the report.

Read more here:

• ​Inthonon-LionRock to mBridge (Building a multi CBDC platform for international payments) - September 2021 
• BIS Press Release
• m-CBDC Project Page