According to a report published by the Bank of International Settlements (BIS) and a group of central banks, digital currency could lead to faster settlement and cheaper transfers. Moreover, the banking group uses a prototype that shows how to transfer money in seconds with very little processing fee.
Cheap Transfers and Speed: Bank of International Settlements Report Says Digital Currency May Be More Effective
In the second week of September, Benot Curie, head of the Bank of International Settlements (BIS) Innovation Hub, explained that central banks need to act quickly so that the central bank can develop digital currency. Cœuré stressed that a digital currency economy already exists and “it will take years for CBDCs to be launched.” Following Cœuré’s statement, BIS is launching digital currency tests with four central banks in the United Arab Emirates, Hong Kong, China and Thailand.
The banking group created a prototype and released a report detailing the group’s results after examining the “Multiple Central Bank Digital Currency Bridge Project (Embridge)”. Benedict Knowles, head of the Hong Kong Center for BIS Innovation Hub, explained that digital currency could be more effective for the banking system and would be beneficial for the economy in general.
“Enabling fast and cheap cross-border wholesale payments, including in a region that does not benefit from a vibrant reporter banking system, would be positive for trade and economic development,” Knowles said in a statement released Monday. The prototype used in collaboration with BIS researchers and central banks was built on Etherium’s hyperlaser Besu blockchain.
Banking Group plans to continue research on distributed laser technology prototypes until a ‘production-ready’ solution is created
Experiments have shown that distributed laser technology (DLT) halves the cost of cross-border exchange and the speed of settlement takes only a few seconds. The report states that the Embryz team’s goal is to continue working at DLT. The group plans to address legal issues and jurisdiction barriers to developing a “production-ready digital currency solution”. As the CBDC is nearing completion, the Embridge project is being built in China to introduce digital yuan.
Embridge’s collaboration was formerly dubbed “Project Inthanon-Lionrock” and was initiated by the Bank of Thailand and the Monetary Authority of Hong Kong. The two technologies published a joint study in 2020 after testing several technologies. The report noted that the DLT model study involved ten small bank branches from two different locations.
What do you think about BIS and the four central banks that make digital currency transactions faster and cheaper? What do you think of the Embridge DLT prototype? Let us know what you think about this in the comments section below.
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