Ralf Ohlhausen Executive Advisor, at PPRO:

“Given the large number of CBDC projects being conducted around the world, it makes good sense to look at their interoperability and the conversions between them. Currently about 60% of central banks (up from 42% in 2019) are conducting experiments or proofs-of-concepts, whilst 14% are moving forward to develop pilot arrangements. The Monetary Authority of Singapore and the Banque de France are not the first to conduct these tests – Hong Kong and Thailand are also investigating cross-border transfers (Project Inthanon-LionRock).

 “CBDCs, once successfully implemented, could provide a wide range of benefits including driving greater efficiency of cross-border payments. But to be able to achieve this central banks must build a multi-CBDC (mCBDC) approach into their design. A recent BIS report conceptualised this into three models: compatible, interlinked or single mCBDC multi-currency system, and explains that through compatible standards, payment systems can reduce frictions and barriers to a diversity of privately offered cross-border and cross-currency services. This is something to be celebrated as this contributes to greater efficiency and transparency surrounding cross-border payments.”