BIS INNOVATION HUB PLAN AT PROJECTS THAT WILL CHECK CBDC’s TRANSFER ACROSS BORDERS
The Bank of International Settlements (BIS) Innovation Hub released a report on Tuesday looking at four projects examining digital bank transfer transfers (CBDC) across borders. Projects have shown the feasibility of transferring technology, received by the BIS, but the real and policy issues remain.
The report explores the Jura project involving central banks in Switzerland and France. Project Inthanon- LionRock2 and the ongoing mBridge project, involving Asian and Middle Eastern funds, were also evaluated, as was the case with Project Dunbar, a joint venture of Australian, Malaysian, Singaporean and South African banking authorities.
Projects address both border payments, where payer and payable to residents of different areas and payment is made in the form of local payment or other currency, as well as overseas payments, where payment occurs between two institutions. , none of them live in the area of registration, although payment is usually made in the local currency.
All transfers used for payment are compared to payment protection, where the transfer of funds in one currency is not completed until the transaction is performed in another currency. Both intraday transfers and permanent platform transfers for models. They use standard platforms, although one project uses a standard platform with separate sub-networks.
All projects have successfully demonstrated the potential for CBDC transfers. They have shown that the use of smart contracts to automate compliance reduces costs involved in transfers. Lack of mediators reduces the cost of transfers, where transactions are recorded in one book and real-time balances are fully reflected. At the same time, project forums were able to maintain separate access policies.
The remaining questions include how the technical forums will work with existing systems, what challenges are brought to balance and how durability and security can be ensured. In addition, strong legal and administrative frameworks will need to be implemented and the economic impacts of the CBDC multi-program must be understood, the report said.