Today the Federal Reserve Bank of New York’s New York Innovation Center (NYIC) and the Monetary Authority of Singapore (MAS) published the findings of their cross border CBDC experiment. The Project Cedar Phase II x Ubin+ (Cedar x Ubin+) simulations found that wholesale CBDC using DLT can reduce settlement times and risk.
This particular trial focused on the interoperability of domestic wholesale CBDC systems with different DLT architectures. It targeted transactions involving relatively illiquid currencies which require one or two intermediary currencies for settlement. This means that payments span across multiple central bank ledgers.
There have been several cross border CBDC experiments to date. Some of them, such as Singapore’s Project Dunbar, MBridge and Icebreaker, use a common hub. However, in Icebreaker’s case, the role of the hub is limited, so it supports domestic CBDCs with different architectures.
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