The Bank for International Settlements (BIS) has completed a pilot study of the use of central bank digital currencies (cbdcs) for cross-border payments in cooperation with the central banks in Norway, Sweden and Israel.
The pilot study, called Project Icebreaker, aims to test the “technical feasibility” of transfers across borders involving different CBDCs and gain an understanding of “key technical and policy options and trade-offs”.
The results of the study were published this week in a reports from BIS, who said that came after study G-20 issued a call to action on how to enhance cross-border payments.
Different CBDCs Can Interoperate
Per the report, the study found that central banks would have “almost complete autonomy” when it comes to designing their own CBDCs, while still making CBDCs interoperable with other CBDCs for cross-border transactions .
It also said that the project has demonstrated that cross-border transactions involving multiple CBDCs can be completed in a matter of seconds. Transfer times of several days compare with today’s commonly used SWIFT system for international transfers.
Additionally, the study showed how a new CBDC system could reduce costs and reduce settlement and counterparty risk for users.
However, one requirement to be able to reap these benefits is that the system is operational 24 hours a day for a retail CBDC.
Part of the “Global Effort to Improve Cross-Border Payments”
In a comment to the report, Torbjorn Hegeland, executive director of financial stability at Norway’s central bank, said the project “contributes to the important global effort to improve cross-border payments,” and that it added “significant value” to the bank. is working on an experimental CBDC for Norway.
Similarly, Sweden’s central bank deputy governor Aino Bunge also praised the project, saying that CBDCs “could enable instant cross-currency transactions in a way that would greatly benefit end users.”
The BIS is often referred to as the ‘Central Bank of Central Banks’, and is headquartered in Basel, Switzerland. The organization is led today by Agustin Carstens, former governor of the Bank of Mexico, who is known to be a fierce critic of bitcoin (btc),
In the past, Carstens has called bitcoin “a combination of a bubble, a Ponzi scheme, and an environmental disaster.” Similarly, Hyun Song Shin, head of research at BIS, has Compare crypto to baseball cards“Without users, it would just be a worthless token.”