Global Fintech is rapidly congealing as Central Bank Digital Currencies (CBDC) are integrating into the Bank for International Settlements (BIS) in order to “lay the foundation for global payments connectivity.” Fintech is said to the coming financial structure for Sustainable Development, aka Technocracy. ⁃ Technocracy News & Trends Editor Patrick Wood
By: Gaurav Raghuvanshi via S&P Global
The Bank for International Settlements and four central banks will test the use of digital currencies for cross-border transactions, as global regulators seek to improve the speed of movement of money in a cheaper, more transparent manner.
The BIS Innovation Hub, along with Reserve Bank of Australia, Monetary Authority of Singapore, Bank Negara Malaysia and South African Reserve Bank, aims to develop prototype shared platforms for cross-border transactions using multiple central bank digital currencies, or CBDCs, the group of global regulators said in a Sept. 2 press release.
The project “brings together central banks with years of experience and unique perspectives in CBDC projects and ecosystem partners at advanced stages of technical development on digital currencies,” said Andrew McCormack, the chief of the BIS Innovation Hub Singapore Centre. The Geneva-based group is confident that the experiment will “lay the foundation for global payments connectivity,” McCormack added.
Interest in CBDCs, which are envisaged as digital notes of fiat currencies, is rising with changes in the way payments are expected to be made in the future. Central banks globally are keen to protect the public’s trust in money as a clutch of cryptocurrencies seek legitimacy as an alternative form of money. A BIS survey of central banks found that 86% were actively researching the potential for CBDCs, 60% were experimenting with the technology and 14% were deploying pilot projects.
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The proposed platform will allow financial institutions to transact directly with each other in the digital currencies issued by participating central banks, eliminating the need for intermediaries and cutting the time and cost of transactions, BIS said. The project will explore the international dimension of CBDC design and support the G20 group of nations’ effort to enhance cross-border payments.
The project is a “significant contribution” to the global vision to make payments cheaper and faster, said Sopnendu Mohanty, the chief of financial technology at the Singapore central bank. “The findings on how a common platform can be governed effectively and managed efficiently will shape the blueprint of the next-generation payment systems.”
The results of the experiment, expected to be published in early 2022, will be used to develop future platforms for global and regional settlements, BIS said. Prototypes of the proposed shared platforms will be developed in collaboration with technical partners on different distributed ledger technology platforms and demonstrated at the Singapore FinTech Festival in November.
The project will also explore governance and operating designs that would enable central banks to share CBDC infrastructures and gain from collaboration between public and private sector experts, it added.
Sourced from Technocracy News & Trends
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