The Bank for International Settlements, or BIS, has announced a partnership with the central banks of Israel, Norway and Sweden to explore international retail and remittance payments use cases for central bank digital currencies (CBDCs).
As per the announcement, the BIS Innovation Hub Nordic Centre, Sveriges Riksbank, the Bank of Israel, and Norges Bank will collaborate for Project Icebreaker, testing key functions and the technological feasibility of interlinking domestic CBDC systems.
The project is aimed at developing a hub to which the participating countries can connect their proof-of-concept CBDC systems.
“This first-of-a-kind experiment will dig deeper into the technology, architecture and design choices and trade-offs, and explore related policy questions” said Beju Shah, Head of the BIS Innovation Hub Nordic Centre.
“These learnings will be invaluable for central banks thinking about implementing CBDCs for cross-border payments.”
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The project will develop an architecture which will enable immediate retail CBDC payments across borders, at a significantly lower cost than with existing systems, which are typically based on payments being sent via several different banks to the final recipient (the so-called correspondent banking system).
The final report of the project will be published in the first quarter of 2023.
