China’s PBOC joins cross-border digital currency project with other central banks

China’s PBOC joins cross-border digital currency project with other central banks

GUANGZHOU, China “” Central banks from China, Thailand, United Arab Emirates and Hong Kong are exploring a digital currency cross-border payment project together.The Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT) worked together to study the application of central bank digital currencies (CBDC) last year.They are now expanding their work to include the People's Bank of China's (PBOC) digital currency research institute and the Central Bank of the United Arab Emirates.Central bank digital currencies have been gaining steam with monetary authorities around the world. They broadly relate to central banks attempting to digitalize their fiat currency.

Precisely what technologies are being used differs from institution to institution.But the group of central banks led by HKMA and BOT are exploring so-called distributed ledger technology (DLT). This refers to databases that are replicated and shared among the entities involved and record transactions. They're not necessarily owned by a single central bank but are a shared ledger of activity. DLT is seen as a way to potentially help make cross-border payments more efficient.The project will explore ways using DLT to "facilitate real-time cross-border foreign exchange payment-versus-payment transactions," said Hong Kong's central bank.Payment-versus-payment is a settlement mechanism to ensure "that the final transfer