The Republic of South Africa, Singapore, Malaysia, and Malaysia have launched a cross-border payment experiment to test the use of digital currencies issued by the state. The Bank for International Settlements is conducting the trial to see if they can simplify transactions or make them more affordable.
Reserve Bank of Australia collaborates with counterparts in Asia-Pacific, Africa and the CBDC project
While many countries are still testing digital currencies from their central banks,CBDCSome are planning to conduct international trials, while others will continue to use domestic applications. Cross-border trials will be conducted by the South African Reserve Bank, Bank Negara Malaysia and Monetary Authority of Singapore.
According to Reuters, the cooperation aims at creating shared platforms for cross-border transactions using different CBDCs. The Bank for International Settlements Innovation Hub (BIS) is responsible for the program. Fraziali Ismail is the Deputy Governor of Bank Negara Malaysia.
The multi-CBDC shared platform… has the potential to go beyond existing payment agreements and serve as the basis for a more efficient international settlement platform.
The report stated that prototype platforms should enable financial institutions to directly deal with each other using sovereign digital currency. This approach would eliminate the need for intermediaries. Transaction times and costs will also decrease. Participants will explore different conceptions of technology, governance, operations.
This is not the first instance of this type of experience. BRI Innovation CenterAnother project involves central banks from China Hong Kong, Thailand, the United Arab Emirates, and other countries. The collaboration between the Swiss National Bank and the Banque de France was announced in June. It aimed to test the use wholesale digital currencies in cross border settlements. In July, the IMF and World Bank recommended that countries collaborate on CBDCs in order to improve cross-border payment.
Hong Kong’s financial authorities launched a second round of testing for the national cryptocurrency issued by the People’s Bank of China. This bank is arguably the most advanced CBDC program. China’s special administrative regions has announced that they will connect their domestic payment system with the mainland’s digital currency network to assess the currency’s ease of use in cross-border scenarios.
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