The Bank for International Settlements (BIS) made an agreement with the central banks of Israel, Norway and Sweden in researching cases of retail payments and international remittances for central bank digital currency (CBDC).
According to BIS, the collaboration is called Project Icebreaker which involves the bank's Innovation Hub Nordic Center to test the main functions and technological efficiency in connecting the domestic CBDC system.
Clarified, the Norwegian Central Bank, the Bank of Israel and Sveriges Riksbank will connect the proof-of-concept* CBDC system in developing the new hub.
*The process of verifying that the idea has potential for a real-world situation
The use of CBDC aims to improve cross-border payments in terms of cost reduction, increased speed and transparency commented Beju Shah, head of Innovation Hub Nordic Centre.
Additionally, Bank of Israel deputy governor Andrew Abir stated that efficient and accessible cross-border payments allow small economies like Israel to potentially issue digital shekels**.
**Test technology on a distributed platform
The BIS also reported that the CBDC transaction pathway involving the central banks of Hong Kong, Thailand, China and the United Arab Emirates has successfully facilitated $22 million worth of cross-border transactions.
As a result, national central banks in Australia, Singapore, Malaysia and South Africa launched similar initiatives in making cross-border improvements.
For the record, all central banks are considering the benefits of launching their respective CBDCs, including President Joe Biden directing government departments and agencies to research the benefits and risks of CBDCs.
