Bank for International Settlements found that payment system efficiency is the key motivator, but unlike other regions, African central banks see CBDCs as a great tool for monetary policy.
The exploration is part of Project Cedar, an experiment conducted by the BIS to test the worthiness of wholesale CBDC in cross-border transactions.
Apart from improving cross-border payments, CBUAE’s governor noted that the pilot was also targeted at enhancing the local financial sector in the Middle Eastern country.
Project Aurum highlighted a technological stack to explore the viability of wholesale and retail CBDCs, utilizing two different tokens—intermediated CBDCs and CBDC-backed stablecoins.
Sveriges Riksbank is also partnering with Norway in Project Icebreaker to test the viability of CBDCs in international retail and remittance payments.
The Hong Kong Monetary Authority and the Bank for International Settlements seek to leverage the benefits of decentralized finance and blockchain while simultaneously boosting funding for SMEs.
BIS and IMF say that using CBDCs could solve many challenges with cross-border movement of funds, but question whether central banks will work together.
In a research report, the BISIH highlighted results achieved from four recent cross-border multiple CBDC platform pilot projects the BIS partook in with different central banks worldwide.
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According to the BIS, the need for the project is due to "the collapse of many stablecoins and decentralized finance (DeFi) lending platforms."
Bank of Israel partnered with the Hong Kong Monetary Authority and the Bank for International Settlements to test the feasibility of a digital shekel for retail use.