China, Hong Kong, Thailand, and UAE Trial Cross-Border Transactions With Digital Currencies – Finance Bitcoin News

Four Asian jurisdictions’ monetary authorities have tested international settlements with state-issued digital currency. As part of this pilot project, the Bank for International Settlements participated in cross-border transactions and foreign currency transactions that totaled more than $22 millions.

Asian Central Banks Pilot International Settlements with Digital Currencies

China, Hong Kong and Thailand’s monetary regulators have tested cross-border payments using digital currencies they issued. Bank for International Settlement Innovation Hub Hong Kong Centre announced the successful conclusion of the pilot.

Real-value transactions were covered in the tests that took place between August 15th and September 23. The transactions were handled through Mbridge (a distributed ledger platform) which was initiated in 2019 by the Hong Kong Monetary Authority and Bank of Thailand. The People’s Bank of China and the Central Bank of UAE joined in 2021.

In a post on Linkedin, the BIS said that 20 commercial banks used the platform during the trial to settle different types of payments for corporate customers. This was mainly in cross border trade. “Over $12 million in value was issued onto the platform facilitating over 160 cross-border payments and FX transactions totalling more than $22 million in value,” it detailed.

Among the participants were the Industrial and Commercial Bank of China, the country’s largest lender, and its Abu Dhabi brand and ICBC (Asia) subsidiary in Hong Kong, according to Financial News, the official newspaper of the PBOC. Also, Bank of China’s Zhejiang branch made payments in digital yuan (eCNY) with HSBC and Siam Commercial Bank for two hi-tech companies in the province.

While the report does not give any further details on the currencies being used, Hong Kong, Thailand, United Arab Emirates and Thailand, have all been conducting tests of central bank digital currencies. Hong Kong’s South China Morning Post also noted that this experiment might undermine the U.S. Dollar in foreign trade, if banks can settle direct without using the greenback.

Russia is not the only country that has been trying to achieve this with its own digital currency projects. A recent report claims that the Russian Federation plans to use its digital ruble to settle with China. This is despite the fact that it has been in a major geopolitical, economic, and political conflict with the West regarding Ukraine. Moscow hopes to start settlements in China with the CBDC by early next year.

The BIS announced that an in-depth report will be published on progress made by the international payment project. This document will include information on technical design and legal policy. It also contains the roadmap for Mbridge’s future.

Are you concerned that CBDC projects such as the one in this report will challenge the U.S. Dollar’s role in international trade? Comment below to share your opinions.

Lubomir Tassav

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.