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Bank of International Settlements concludes a ‘successful' CBDC trial

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(Kitco News) - A month-long pilot project testing a multi-jurisdictional central bank digital currency (CBDC) has been deemed successful by the Bank for International Settlements (BIS), according to a recent post from BIS advisor Daniel Eidan. 

The “mBridge” pilot project (also known as Multiple CBDC or mCBDC), involved the central banks of Hong Kong, Thailand, China and the United Arab Emirates along with 20 commercial banks located in those regions and was designed to test the cross-border transaction capabilities of the CBDC. 

Over the course of the trial, more than $12 million worth of value was issued to test the platform. There was a total of 164 foreign exchange transactions and cross-border payments conducted during the month-long test totaling more than $22 million in value. 

CBDC pilot details provided by the BIS. Source: LinkedIn

When asked whether this pilot “also explored commercial aspects of cross border payments or focused more on the bank-to-bank settlements,” Eidan responded that the BIS “focused on wholesale cross-border payments and the role of the Central Banks,” and suggested that the bank will “likely consider more commercial aspects in future stages of our work.”

The mBridge platform is a subset of the larger Project Inthanon-LionRock, a distributed ledger technology (DLT) CBDC cross-border payment endeavor involving the Thai and Hong Kong central banks that launched in Sept. 2019. 

The first phase of the project, which was completed in January 2020, involved peer-to-peer fund transfers and foreign exchange transactions. Phase two included mBridge testing and experiments exploring appropriate governance models with jurisdiction-specific regulations. 

Another goal of phase two was to design a novel cross-border payment system that resolves the current pain points of banks, including high cost, low speed, and operational complexities. Testing showed that the system processed international transfers and foreign exchange operations in just a few seconds, a vast improvement from the average time of several days on the existing network of commercial banks, which is in operation 24/7.


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Phase two also enabled multiple central banks to explore a DLT cross-border payment system that will allow them to issue and distribute their own CBDC.

Following the successful completion of the platform's first pilot program, the project will move into its third and final phase before releasing a bare-bones version of the product that only includes the platform’s core functionality to the market. 

Once feedback on the minimum version is received and revisions are made, the BIS will prepare to release a fully-functional CBDC cross-border payment platform. A detailed progress report on mBridge covering its technical design, legal, policy, and regulatory considerations, as well as a roadmap, will be released in October. 

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