Central banks trial the use of blockchain for cross-border payments

The Bank of Canada and Monetary Authority of Singapore (MAS) have announced they have carried out digital currency transfers using blockchain technology. 

“The world of cross-border payments is complicated and expensive. Our exploratory journey into the use of DLT to try to reduce some of the costs and improve traceability [] has yielded many lessons,” said Scott Hendry, Bank of Canada Senior Special Director, Financial Technology.

During the trial, the two central banks used their respective blockchain platforms—Project Jasper and Project Ubin - and linked them together in Hashed Time-Locked Contracts (HTLC). This allowed them to settle payments without an intermediary. Following the trials, its partners Accenture and JPMorgan, published a report discussing design options for cross-border settlement systems and HTLC implementation.

“The next wave of central bank blockchain projects can make further progress by bringing technology exploration together with policy questions about the future of cross-border payments,” said Sopnendu Mohanty, Chief FinTech Officer at MAS. “It is challenging work, and we welcome other central banks to join us in this global collaboration, to bring benefit to consumers, businesses and the broader financial industry.”