UAE joins Hong Kong and Thailand’s digital currency project
The UAE Central Bank joined the second phase of a digital currency project for cross-border payments initiated by the Hong Kong Monetary Authority and the Bank of Thailand.
The initiative, which succeeds Project Inthanon-Lion-Rock by the HKMA and Thai central bank, will explore the capabilities of distributed ledger technology in enabling real-time, cross-border payments. It will focus on the development of a proof-of-concept prototype, the banking regulators said yesterday.
Named the m-CBDC Bridge project, it is expected to make cross-border transfers quicker and easier by removing complex regulatory compliance procedures and other inefficiencies.
It will also look at businesses-use cases for domestic and foreign currencies in cross-border payments.
UAE Central Bank governor Abdulhamid Saeed said the regulator and the Saudi Central Bank recently completed a proof-of-concept project on a wholesale central bank digital currency “to settle domestic and cross-border transactions using central bank money on a distributed ledger technology”.
“Building on this momentum, the UAE Central Bank is very excited to be able to use the experience gained so far and participate in the m-CBDC Bridge project,” said Mr Saeed at the signing of a FinTech collaboration agreement between the UAE regulator and the HKMA.
“The participating central banks will take into account the results of the PoC [proof of concept] work to evaluate the feasibility of the m-CBDC Bridge project for cross-border fund transfers, international trade settlement and capital market transactions,” the regulators said yesterday.
The Digital Currency Institute of the People’s Bank of China is also joining the project. Authorities in Hong Kong and Thailand launched the first phase of the study, which studies the role of central bank digital currencies for cross-border payments, in the fourth quarter of 2019.