China and UAE central bank join hands for digital currency cross-border payments
The Hong-Kong Monetary Authority (HKMA) with Bank of Thailand, Central Bank of the United Arab Emirates (CBUAE) and the Digital Currency Institute of the People’s Bank of China (PBC DCI) have announced the joining of CBUAE and the PBC DCI to the second phase of Project Inthanon-LionRock (Note), a central bank digital currency project for cross-border payments initiated by the Hong Kong Monetary Authority and the Bank of Thailand, the press release by HKMA noted.
The release also mentions that the project, “strongly supported by the Bank for International Settlements Innovation Hub Centre in Hong Kong and the project has been renamed as “Multiple Central Bank Digital Currency (m-CBDC) Bridge”.
The m-CBDC Bridge Project would explore the capabilities of distributed ledger technology (DLT) with the development of a proof-of-concept (PoC) prototype which would facilitate real-time cross foreign exchange payment-versus-payment transactions in a multi-jurisdictional context and on a 24/7 basis. The project will also explore the business use cases in the cross-border context both with domestic and foreign currencies, the press release noted.
The release also emphasises the environment for more central banks in Asia as well as other regions to jointly study “the potential of DLT in enhancing the financial infrastructure for cross-border payments”.
“The outcome is expected to alleviate the pain points in cross-border fund transfers, such as inefficiencies, high cost and complex regulatory compliance”.