Monetary authorities in four Asian jurisdictions conducted tests of international payments using state-issued digital currencies. Over $22 million in cross-border payments and foreign exchange transactions were made as part of a pilot project involving the Bank for International Settlements.
Asian Central Banks Trial Real-Value International Payments Using Digital Currencies
Monetary policy regulators in China, Hong Kong, Thailand and the United Arab Emirates have conducted trials of cross-border payments using issued digital currencies. The successful pilot was announced by the Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre.
The tests, conducted from August 15th to September 23rd, covered real value trading. They were processed through a distributed ledger platform called Mbridge, a payment project launched in 2019 by the Hong Kong Monetary Authority, the Bank of Thailand and the BIS Innovation Hub. The People’s Bank of China and the UAE Central Bank will join in 2021.
During the trial, 20 commercial banks used the platform to settle various types of payments for corporate customers. Mostly cross-border transactions, BIS explained in his Linkedin post. “More than $12 million in value has been issued to the platform, facilitating over 160 cross-border payments and FX transactions totaling more than $22 million,” it details.
According to Financial News, the PBOC’s official newspaper, among the participants were China’s largest lender, Industrial and Commercial Bank of China, and its Abu Dhabi brand and ICBC (Asia) subsidiary in Hong Kong. Also, Bank of China’s Zhejiang branch has made digital yuan (eCNY) payments to HSBC and Siam Commercial Bank for two of his high-tech companies in the province.
The report did not provide details about other currencies being used, but besides China, which is expanding its eCNY pilot project, Hong Kong, the United Arab Emirates and Thailand are also central bank digital currencies. (CBDC) is being tested. , noted the South China Morning Post. The Hong Kong-based publication also said the experiment could undermine the US dollar’s role in foreign trade if banks were allowed to settle directly without the US dollar.
Other countries, such as Russia, are also aiming for the same with their own digital currency projects. According to recent reports, the Russian Federation plans to use the digital ruble to reconcile with its key ally and trading partner China amid geopolitical and economic conflicts with the West over Ukraine. Moscow hopes to initiate a settlement with her CBDC early next year.
In its announcement, BIS said a detailed report on the progress of the international payments project will be released in October. This document covers aspects such as technical design, laws, policies, and other regulatory considerations, and presents the future roadmap for the Mbridge platform.
Do you expect CBDC projects like the one described in the report to challenge the US dollar’s role in global trade? Share your thoughts on the matter in the comments section below.
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China, Hong Kong, Thailand, United Arab Emirates Trial Cross-Border Transactions in Digital Currencies
Source link China, Hong Kong, Thailand, United Arab Emirates Trial Cross-Border Transactions in Digital Currencies