Bank of International Settlements Plans Interoperable CBDC Tests ‘in Coming Weeks’
A spokesperson for the Bank of Israel has told BeInCrypto that technical work on ‘Project Icebreaker’ will begin in ‘the coming weeks.’
Project Icebreaker is a collaborative effort between the Bank of International Settlements (BIS) Innovation Hub and the central banks of Israel, Norway, and Sweden to test the feasibility of interlinking separate Central Bank Digital Currencies (CBDC).
The Bank of Israel has designed a ‘hub’ to facilitate communication and data exchange among the national CBDC systems. According to the Governor of the Bank of Israel, Amir Yaron, the concept requires only minimal adjustments to the national CBDC systems in “order to achieve the desired interoperability.”
If all goes to plan, this would make international payments instantaneous and remove counterparty risk in global banking systems.
Project Icebreaker Aims To Streamline International Payments Via CBDCs
Over one hundred countries are researching CBDCs, although the technology is still in its infancy. Currently, there has been limited work on how different CBDCs will work with each other to allow for immediate cross-border payments and remittances.
Yaron believes that their system is agile and capable enough to allow different CBDCs to effectively and seamlessly talk to each other.
BIS Innovation Hub, BIS-housed Committee on Payments and Market Infrastructures (CPMI), International Monetary Fund (IMF), and World Bank jointly published a report titled ‘Options for access to and interoperability of CBDCs for cross-border payments’ in July last year. Project Icebreaker aims to take that work a step further.
The Bank of Israel’s Governor, Amir Yaron, spoke about the project at the World Economic Forum last week. “We are in the midst of a technological revolution in the payment system… I believe it is the first CBDC retail experiment that takes a retail payment from a household or a merchant in Israel, paying in Shekels, and transferring it back to somebody in Sweden or Norway.”
Yaron also said that, eventually, CBDCs could remove the need for stablecoins altogether.
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