ABSTRACT
In February 2021, Hong Kong Monetary Authority (HKMA), Bank of Thailand (BoT), Central Bank of the UAE and Digital Currency Institution of People’s Bank of China announced the Multi-CBDC Bridge project to explore the application of central bank digital currency (CBDC) in cross-border payments. The project is supported by the Innovation Hub of Bank of International Settlement (BIS) in Hong Kong. “Wholesale CBDC + Multi-CBDC Bridge” could be the most important approach in the application of CBDC in cross-border payments. Multi-CBDC Bridge is highly efficient economically with great capacity. With Multi-CBDC Bridge, one country’s currency can circulate among foreign commercial banks in the form of depository certificates, thus respecting the monetary sovereignty of foreign countries and easing the concern of currency substitution. Multi-CBDC Bridge can accelerate the cooperation between central banks and inter-connect different CBDC projects, helping to form a global standard for CBDC.
