Some of Asia’s largest banking institutions are working together on a “multiple” CBDC project, designed to cross borders and navigate regulations easier than fiat.
Several major banks across Asia have joined forces to construct a cross-border central bank digital currency, according to a joint announcement issued on Feb. 23.
Dubbed the Multiple Central Bank Digital Currency Bridge, or m-CBDC, the project sees the Hong Kong Monetary Authority, the Bank of Thailand, the Central Bank of the United Arab Emirates and the Digital Currency Institute of the People’s Bank of China combine to create a CBDC prototype using distributed ledger technology.
Building upon the “Inthanon-LionRock” research project started in 2019, the latest phase of the exploration into CBDCs will develop a proof-of-concept to “facilitate real-time cross-border foreign exchange payment-versus-payment transactions in a multi-jurisdictional context and on a 24/7 basis,” states the announcement.
The stated aim of the project is to address “pain points” in conducting cross-border transfers. These include cost inefficiencies and the complex regulation that accompanies moving money from one country to another.
As previously described by the deputy governor of the Bank of Thailand, Mathee Supapongse:
“The model offers a cross-border corridor network where participants can transfer funds instantaneously on a peer-to-peer basis and in an atomic PvP manner. The design and key findings of the project have added new dimensions to central bank communities’ studies on cross-border funds transfer area.”