Central banks in Israel, Norway and Sweden will team with the Bank of International Settlements to explore how CBDC can be exploited for international retail and remittance payments.
According to Finextra, with BIS playing a key role in the G20 programme, it has now brought in the Bank of Israel, Central Bank of Norway, Sveriges Riksbank and its own Innovation Hub Nordic Centre for Project Icebreaker.
Project Icebreaker will last until the end of 2022 and will develop a ‘hub’ to which participating central banks will connect their domestic proof-of-concept CBDC systems.
The objective of the project is to test some specific key functions and the technological feasibility of interlinking different domestic CBDC systems.
Finextra highlighted that the architecture is designed to enable immediate retail CBDC payments across borders, at a substantially lower cost than with existing systems, which are often based on the correspondent banking system.
BIS Innovation Hub Nordic Centre head Beju Shah said, “This first-of-a-kind experiment will dig deeper into the technology, architecture and design choices and trade-offs, and explore related policy questions. These learnings will be invaluable for central banks thinking about implementing CBDCs for cross-border payments.”
Earlier this year, a UK consortium of private sector firms revealed it would begin a year-long pilot scheme to test cross-border payments and provide recommendations to the Bank of England.
The Digital FMI Consortium will start the pilot scheme in October this year and run it till October 2023 at a minimum, claims CoinDesk.
The consortium will provide recommendations to the Bank of England using dSterling, its own sterling-backed stablecoin.
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