The Bank for International Settlements has said digital currencies will reduce the cost of cross-border payments.

BIS said this in a report titled ‘Inthanon-LionRock to mBridge: Building a multi CBDC platform for international payments’.

According to the BIS, CBBCs can reduce the process speed of cross-border payments from three to five working days to only a few seconds.

The bank made this claim as part of the conclusion it drew from phase two of Project Inthanon-LionRock involving the central banks of China, the United Arab Emirates, and the Hong Kong Monetary Authority.

BIS said, “The prototype demonstrates a substantial increase in cross-border transfer speed from days to seconds, as well as the potential to reduce several of the core cost components of correspondent banking.”

In the report, a PricewaterhouseCoopers estimate said that there was the possibility of a 50 per cent reduction in the cost of cross-border payments.

– Punch