The Bank of International Settlements (BIS) believes that multiple central bank digital currencies (mCBDCs) can significantly reduce the time needed for cross border payments from days to seconds. The international financial institution has found that mCBDCs test with four central banks (the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People's Bank of China and the Central Bank of the United Arab Emirates) demonstrated the "potential of using digital currencies."
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"The prototype demonstrates a substantial increase in cross-border transfer speed from days to seconds, as well as the potential to reduce several of the core cost components of correspondent banking," the BIS said.
The institution says the prototype platform for mCBDC settlements reduced the cost of cross border transfers by up to half. As part of the joint experiment, the BIS completed international transfers and foreign exchange operations in seconds, as opposed to the several days normally required for any transaction.
Meanwhile, payments heavyweight Visa also prepared a concept for interconnecting multiple blockchain networks together. The so-called "Universal Payment Channel" (UPC) allows central banks and businesses to exchange value with no dependence on the form factor of the currency, Visa said in a recent blog announcement.
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