Visit the original article*
Multiple CBDC bridge, a project by four monetary authorities to build infrastructure to connect central bank digital currencies (CBDC), revealed 15 use cases and 22 participants for the project at Hong Kong Fintech Week on Thursday.
- The project is a collaboration between the Bank of Thailand, the Central Bank of the United Arab Emirates, Hong Kong’s Monetary Authority (HKMA), the People’s Bank of China, and the Bank of International Settlements (BIS). It aims to lower costs and improve the speed of international transactions, using CBDCs.
- According to the announcement, major financial institutions like Goldman Sachs, HSBC, Société Générale, and China’s six biggest state-owned banks are also involved.
- A total of 22 industry participants across jurisdictions will test the 15 use cases during a pilot that will start in 2022, said a brochure posted by Bank of Thailand that also revealed the specific projects.
- Goldman Sachs Asia will test tokenized bond issuance and atomic settlement, DBS Bank Hong Kong will trial cross-boundary insurance payments between mainland China and Hong Kong, HSBC will try out “feature-rich” programmable trade finance, and Société Générale subsidiary FORGE will look into issuing digital native corporate bonds.
- Already, “testing of sample trade settlement transactions across 11 industries has commenced on the trial platform,” said a video presentation of the project at the Hong Kong conference.
- The project’s steering committee has given priority to trade settlement because of the potential of mCBDC to lower costs and improve speed in the massive industry, according to the presentation. Trade between the four was more than $730 billion in 2019, the presentation noted citing World Bank data.
- In September, the participating banks revealed that they had built a phase 2 prototype.
- Head of the Hong Kong Centre of the BIS Innovation Hub, Bénédicte Nolens, described the project as a “massive undertaking.” Colin Pou, Executive Director at the HKMA explained it is better to build a new system for CBDC settlement rather than try to recalibrate the existing infrastructure.
Read more: Central Banks of China, UAE Join Blockchain-Based CBDC Payments Project