![](https://i.imgur.com/CLvY2jA.png")
11-11-2021, 10:08 AM
November 4, 2021by Ledger Insights
It’s a little provocative to say the Multi CBDC or M-CBDC Bridge project for cross border payments might replace SWIFT, even just in Asia, given it’s at such an early stage. However, should it reach production, it will remove the need for SWIFT for the participant jurisdictions.
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With the help of the Bank for International Settlements (BIS), the central banks of China, Hong Kong (HKMA), Thailand and the UAE are developing a shared DLT system where they can use their own CBDCs for cross border payments. The initiative is an extension of the Inthanon LionRock project between Thailand and Hong Kong.
So far, it seems settlement can be reached in under two seconds and it could cut the cost of international payments in half.
If you ask SWIFT, they’d say payments are usually instant with their messaging system. However, the current correspondent banking system involves intermediary banks, especially in Asia. This creates bottlenecks while they check KYC details and adds massive costs and delays. The blockchain-based M-CBDC project enables instant direct payments between banks, which removes that cost layer.
......
Not every country globally has a real time gross settlement (RTGS) system, and the quality varies. The Central Bank of UAE’s Li observed, “It (M-CBDC Bridge) also does domestic funds transfer between banks and central banks. To a certain extent (it’s) even more efficient, effective and highly more resilient than a lot of domestic RTGS.”
https://www.ledgerinsights.com/chinas-6-...placement/
It’s a little provocative to say the Multi CBDC or M-CBDC Bridge project for cross border payments might replace SWIFT, even just in Asia, given it’s at such an early stage. However, should it reach production, it will remove the need for SWIFT for the participant jurisdictions.
......
With the help of the Bank for International Settlements (BIS), the central banks of China, Hong Kong (HKMA), Thailand and the UAE are developing a shared DLT system where they can use their own CBDCs for cross border payments. The initiative is an extension of the Inthanon LionRock project between Thailand and Hong Kong.
So far, it seems settlement can be reached in under two seconds and it could cut the cost of international payments in half.
If you ask SWIFT, they’d say payments are usually instant with their messaging system. However, the current correspondent banking system involves intermediary banks, especially in Asia. This creates bottlenecks while they check KYC details and adds massive costs and delays. The blockchain-based M-CBDC project enables instant direct payments between banks, which removes that cost layer.
......
Not every country globally has a real time gross settlement (RTGS) system, and the quality varies. The Central Bank of UAE’s Li observed, “It (M-CBDC Bridge) also does domestic funds transfer between banks and central banks. To a certain extent (it’s) even more efficient, effective and highly more resilient than a lot of domestic RTGS.”
https://www.ledgerinsights.com/chinas-6-...placement/
