Several major banks across Asia have joined forces to create a digital currency on the central bank, according to a joint statement on February 23.
In a project called the Multiple Central Bank Digital Currency Bridge – or m-CBDC – the Hong Kong Monetary Authority, the Bank of Thailand, the Central Bank of the United Arab Emirates, and the People’s Bank of China Institute of Cryptocurrencies together create a prototype for CBDC using distributed ledger technology.
Building on the ‘Inthanon-LionRock’ research project launched in 2019, the final phase of CBDC research will develop an experimental concept to ‘facilitate cross-border currency payment for real-time payment transactions in a multi-user mode. – The judicial context and around the clock, “the letter says.
The stated goal of the project is to eliminate “weaknesses” in implementing cross-border transfers. They include the cost-effectiveness and complex regulations associated with transferring money from one country to another.
As formerly Deputy Governor of the Bank of Thailand Matthe Subabungsi described:
“The model introduces a cross-border corridor network where participants can instantly transfer funds on a peer-to-peer and atomic-scale PvP basis. The project’s design and key findings added new dimensions to the central banking community’s research on cross-border transfers.”
Central banks participating in the project hope to attract more institutions to the scheme and seek to create an environment more conducive to CBDC research in Asia and beyond.
The rapid growth of cryptocurrencies in recent years has forced many governments and central banks to create digital alternatives to decentralized currencies such as Bitcoin (BTC), Ether (ETH) and many more.
The failure of governments to control or track the flow of cryptocurrencies will undoubtedly lead to digital commercial bank digital currency becoming popular in the coming years. China is in the forefront of creating CBDC and is already testing biometric portfolios for digital yuan.