4 Asian countries test international settlements using digital currencies

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Thu, 28 Sep 2023, 02:18 PM
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4 Asian countries test international settlements using digital currencies

The trial was also participated by 20 commercial banks which used the platform for the settlement of cross-border trades for their corporate customers.

Hong Kong / Image by: Wikimedia Commons

Fri, 30 Sep 2022, 04:16 am UTC

Four Asian countries have carried out tests using digital currencies for international settlements. The Bank of International Settlements (BIS) participated in the tests, which included foreign exchange transactions and cross-border payments worth over $22 million as part of the pilot project.

The four countries that took part in the cross-border payments using state-issued digital currencies trials are China, Hong Kong, Thailand, and the United Arab Emirates, according to Bitcoin.com. The BIS Innovation Hub Hong Kong Centre announced the successful completion of the pilot.

The tests covered real-value transactions and took place between August 15 and September 23 this year. To process the transactions, the pilot used the distributed ledger platform Mbridge, a payment project launched by the Hong Kong Monetary Authority, Bank of Thailand, and the BIS Innovation Hub in 2019 while the Central Bank of UAE and the People’s Bank of China joined two years later.

The trial was also participated by 20 commercial banks which used the platform for the settlement of cross-border trades for their corporate customers. “Over $12 million in value was issued onto the platform facilitating over 160 cross-border payments and FX transactions totaling more than $22 million in value,” the BIS said.

According to PBOC’s official publication Financial News, the commercial participants in the trial included China’s largest lender, the Commercial Bank of China together with its Abu Dhabi arm, and the Hong Kong subsidiary of ICBC (Asia). The report also mentioned that the Zhejiang branch of the Bank of China used digital yuan (eCNY) to send payments to the Siam Commercial Bank and HSBC, which are intended for two of the province’s high-tech firms.

Aside from the eCNY, the report did not specifically mention any other state-issued digital currency used in the tests. What is known is that aside from China, the UAE, Hong Kong, and Thailand have also been testing their respective central bank digital currencies (CBDCs).

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