After establishing a joint venture with swift, the People's Bank of China once again worked hard to explore the application of digital currency in cross-border payments. The People's Bank of China disclosed the situation of the Hong Kong Monetary Authority of the Central Bank of Thailand on February 24. The UAE Central Bank and the People's Bank of China Digital Currency Research Institute (hereinafter referred to as the "People's Bank of China Digital Currency Research Institute") jointly launched the m-cbd bridge research project.
It is reported that through the development of a pilot prototype, the m-cbdc bridge will further study DLT to realize the round-the-clock PVP settlement of cross-border transactions in the central bank's digital currency to facilitate the exchange of domestic and foreign currencies in cross-border trade scenarios.
A number of interviewed experts told reporters of the International Finance News that the 24-hour simultaneous settlement (PVP) of the central bank's digital currency for cross-border transactions is a general project to reduce the risks of cross-border transactions. Through similar projects, transactions can be promoted and security can be improved. By opening the m-cbdc bridge, we can understand the technical paths, standards, and policy design of various countries in the process of developing central bank digital currencies, and prepare for the future digital renminbi to go global. "Exploring digital currency cross-border payments", it is understood that the Hong Kong Monetary Authority announced on February 23 the exchange of memorandums of understanding with the Central Bank of the United Arab Emirates, and the UAE Central Bank and the Central Bank Data Institute have officially joined the central bank's digital currency cross-border The internet. The central bank's digital currency cross-border network is a M CBCDCARCH research project jointly initiated by the Central Bank of Thailand and Hong Kong Monetary Authority.
The UAE Central Bank and the People's Bank of China Digital Currency Research Institute jointly discussed the application of central bank digital currencies in cross-border payments. The above-mentioned cross-border network was initiated by the Hong Kong Monetary Authority and the Bank of Thailand, and supported by the Hong Kong Center of the Bank for International Settlements Innovation Center. It was originally called the "Non-Lion Rock Project". The aim is to further study the capabilities of distributed ledger technology (DLT) through the development of a proof-of-concept prototype to promote real-time cross-border simultaneous settlement of foreign exchange transactions and explore cross-border transactions in domestic and foreign currencies.
The institute stated that the multilateral central bank digital currency bridge research project will further create a favorable environment for more central banks in Asia and other countries to work together to improve the cross-border payment capabilities of financial infrastructure to solve the low efficiency and high cost of cross-border payments. And the problem of low transparency. Based on the research results, participants will evaluate the feasibility of applying the multilateral central bank digital currency bridge to cross-border capital allocation, international trade settlement, and foreign exchange transactions.
Wang Pengbo, a senior analyst in the payment industry, told the International Finance Daily that PvP is a universal project to reduce the risk of cross-border transactions. Through similar projects, it can facilitate transactions and improve security. The Institute of Mathematics of the Central Bank initiated a multilateral central bank digital currency bridge research project, mainly to pave the way for the internationalization of the digital renminbi.
Liu Bin, director of the Financial Research Department of the Shanghai Pudong Reform and Development Institute, told the International Finance Daily that at present, the digital renminbi is not entirely based on distributed accounting technology, but the digital currencies of major central banks in the world are basically based on distributed accounting technology. , Some countries have adopted the CBDC wholesale model in cross-border applications, and China’s current central bank digital currency is a universal CBDC. It's different in many ways. Currently, digital RMB has been tested in many cities and scenarios in China, but for cross-border applications, public testing has not yet been conducted. Cross-border applications need to be connected in terms of technology, policies and standards, and the launch of the multilateral central bank's digital currency bridge research project can promote the pilot of the digital renminbi in these aspects.
Promoting the internationalization of digital renminbi
In fact, cross-border payments in digital currencies are advancing steadily. In early February, the central bank agency cooperated with the Global Association for Banking, Finance and Telecommunications (SWIFT) to establish Financial Gateway Information Services Co., Ltd. in Beijing. In November 2020, Huo Xuewen, director of the Beijing Municipal Financial Supervision Bureau, stated that he will actively promote digital currency cross-border payment applications in the airport area.
Yu Weiwen, President of the Hong Kong Monetary Authority (HKMA), later stated that the HKMA is working with the People's Bank of China (People's Bank of China) Digital Currency Research Institute to study the use of digital renminbi for cross-border payment technical testing and corresponding technical preparations. A government work report recently issued by Zhuhai City also mentioned that this year will be committed to strengthening the Guangdong-Macao cross-border financial cooperation (Zhuhai) demonstration zone, and strive to experiment with the use of digital renminbi in cross-border situations.
Jiang Zhaosheng, an analyst at Zero One Think Tank and a researcher at the Institute of Digital Assets, said in an interview with a reporter from the International Finance News that the digital renminbi has made gratifying progress since 2019, but its path to internationalization has been relatively slow. On the one hand, the previous research and development pilot work of the digital renminbi was mainly carried out on the domestic market, with the starting point of serving the domestic real economy, and the connection with other countries and international organizations was not close enough; on the other hand, the launch of the digital renminbi was a huge system Engineering, risk prevention and control is the top priority. As a digital currency mainly oriented to the domestic retail market, digital renminbi needs to ensure the stability of its underlying system, the availability of functions, the convenience of the use process and the matching of related scenarios in order to have sufficient domestic and international competitiveness.
At present, after many red envelopes, my country has conducted a certain degree of inspection on the transaction performance and technical structure of the digital renminbi. In view of the obvious advantages of digital renminbi in international cross-border payment and settlement, it can play a greater role in international business in the future, and strengthen its voice in various related international organizations by strengthening relevant cooperation with neighboring countries. Such cooperation may be an opportunity for the internationalization of the digital renminbi. Jiang Zhaosheng said.
Liu Bin pointed out that the multilateral central bank digital currency bridge research project initiated by the Central Bank of China will promote the development of cross-border payments and digital renminbi. "We have accumulated a lot of experience in the world's leading digital renminbi pilot project, and we can provide technical support and experience for other countries in the process of cooperative research and development. Of course, we can also improve our voice in standard setting.
In addition, you can also prepare for future cross-border payment and digital RMB internationalization by adding this item, such as how to technically connect with other countries, or find solutions suitable for cross-border payment and digital RMB internationalization, and explore feasible Application solutions, etc., so as to promote the future internationalization and cross-border applications of digital renminbi.