Central banks from China, Thailand, UAE, Hong Kong to explore digital currency for cross-border payments

The Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT) have worked together to study the application of central bank digital currencies (CBDC).

The central banks 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.

According to CNBC, what technologies are being used differs from institution to institution. The group of central banks led by HKMA and BOT are exploring distributed ledger technology (DLT). DLT is seen to potentially help make cross-border payments more efficient.

As cross-border payments are traditionally slow and expensive, central banks believe that central bank digital currencies could speed them up. The central banks aim to explore business use cases in a cross-border context using both domestic and foreign currencies.

While several central banks are exploring digital currencies, it is China’s central bank that is furthest ahead, at least with a domestic version. However, the PBOC has been very secretive about its efforts with digital currencies. According to CNBC, some commentators have suggested a digital yuan could help internationalise China’s currency. And the cross-border project with the central banks of Hong Kong, Thailand and the UAE could be evidence of that intention.

To learn more about CBDCs, download our ebook Central Bank Digital Currencies for Dummies – A Quick Guide into CBDCs.