use of cryptocurrencies to protect consumers and maintain financial stability. Now, the BIS has released a new report on the potential of CBDCs in cross-border payments.
The report summarizes the findings of “Project Icebreaker,” a trial conducted by the BIS to explore the feasibility of using a retail CBDC in cross-border transactions. The experiment tested the technical capabilities of conducting cross-currency transactions between different distributed ledger technology-based CBDC proof of concepts.
According to the report, the trial was successful in proving the technical feasibility of cross-border retail CBDC payments. The experiment demonstrated that CBDCs could potentially offer faster, cheaper, and more secure cross-border payments than traditional methods.
However, the report also highlighted several challenges that need to be addressed before CBDCs can be widely adopted for cross-border payments. These challenges include regulatory and legal issues, interoperability between different CBDC systems, and the need for a robust infrastructure to support CBDC transactions.
Despite these challenges, the BIS believes that CBDCs have the potential to revolutionize cross-border payments and improve financial inclusion. The report concludes by calling for further research and collaboration between central banks and other stakeholders to explore the potential of CBDCs in cross-border payments.
Overall, the BIS’s report on “Project Icebreaker” provides valuable insights into the potential of CBDCs in cross-border payments. While there are still challenges to overcome, the experiment has shown that CBDCs could offer significant benefits to consumers and businesses alike.
