Central Banks of China and United Arab Emirates have joined the second phase of Project Inthanon-LionRock, a Central Bank Digital Currency (CBDC) project for cross-border payments initiated by the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT).
This joint effort of some the central banks in Asia are strongly supported by the Bank for International Settlements Innovation Hub Centre in Hong Kong and the project has been renamed as “Multiple Central Bank Digital Currency (m-CBDC) Bridge”.
The Central Bank of the United Arab Emirates (CBUAE) and the Digital Currency Institute of the People’s Bank of China (PBC DCI) have now joined the m-CBDC Bridge Project, which will explore business use cases in a cross-border context using both domestic and foreign currencies.
The m-CBDC Bridge Project will further explore the capabilities of distributed ledger technology (DLT), through developing a proof-of-concept (PoC) prototype, to facilitate real-time cross-border foreign exchange payment-versus-payment transactions in a multi-jurisdictional context and on a 24/7 basis.
The project is expected to alleviate the pain points in cross-border fund transfers, such as inefficiencies, high cost and complex regulatory compliance.
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.
The first phase of the project was launched in September 2019 as a joint initiative between HKMA and BOT to leverage DLT to develop a cross-border fund transfer corridor network as bridge between the Inthanon and the LionRock networks.
The first phase was completed in December 2019 and a DLT-based proof-of-concept (PoC) prototype was developed successfully together with ten participating banks.
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