The initiative is part of the Rialto project, implemented jointly with a number of central banks

BIS will start using CBDC to improve the efficiency of cross-border payments

04.06.2024 - 14:40

182

3 min

What’s new? The Bank for International Settlements (BIS) will start using central bank digital currencies (CBDCs) for instant cross-border payments. The initiative is part of the Rialto project run by the BIS Innovation Hub Eurosystem, which is supported by the central banks of Germany and France.

Bitcoin com’s material

What else is known? Project Rialto aims to reduce liquidity, settlement, and leverage risks. To achieve it, the potential of CBDC, decentralized finance technology (DeFi), and interconnected payment infrastructures are being explored.

The project will propose a tool that solves the problems of expensive, complex, and low-speed currency services.

In addition to the BIS Innovation Hub, the project involves its Singapore unit and a number of central banks.

A BIS survey of central banks in 2021 found that 86% are actively exploring the potential of CBDC, 60% are experimenting with the technology and 14% are implementing pilot projects.

Central Bank of the Philippines plans to launch a CBDC without blockchain technology in the next two years

Central Bank of the Philippines plans to launch a CBDC without blockchain technology in the next two years

According to the head of the regulator, this is due to the unsuccessful experience of implementation of a distributed registry by other central banks

Read more

CBDC is also called a national cryptocurrency, it is another form of money along with cash and non-cash, representing a digital banknote. CBDC can be used by individuals to settle payments with businesses, stores, or among themselves (retail CBDC), and between financial institutions to settle transactions on financial markets (wholesale CBDC).

As BIS writes, the introduction of CBDC could facilitate a diversity of payment methods, make cross-border payments faster and cheaper, increase access to financial services, and possibly facilitate fiscal transfers in times of economic crisis (e.g., a pandemic).

One of the objectives of the BIS Innovation Hub is to build CBDC prototypes with central banks around the world.

BIS will focus on ensuring CBDC privacy this year

BIS will focus on ensuring CBDC privacy this year

In November, the organization had already presented the first prototype of an anonymous national cryptocurrency

Read more

Last month, Deutsche Bank joined the Central Bank of Singapore’s Project Guardian initiative to tokenize foreign currencies, funds, and bonds to increase global liquidity. Deutsche Bank, Ripple, and Nubank are also part of the BIS cross-border payments task force.

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy