Daniel Eidan of BIS: “Central banks and innovation can co-exist”

    Also watch on:
Podcast available on:

Interviewed By Foo Boon Ping

Inclusive innovation in central banking can enhance monetary and financial stability, according to Daniel Eidan, advisor and solution architect of BIS, speaking at the Excellence in Retail Financial Services Convention 2023

  • CBDCs can connect economies more effectively by reducing the cost of cross-border settlements
  • Technology developed by BIS Innovation Hub enables atomic and instant cross-border transactions
  • Rollout of technologies still depends on individual governance of central banks

Daniel Eidan leads the development of solutions for central banking systems in order to facilitate cross-border payments transactions and correct inefficiencies using blockchain, distributed ledger technology and central bank digital currencies (CBDC). He is the advisor and solution architect at the Bank for International Settlements (BIS).

Two of BIS Innovation Hub’s ongoing projects are aimed at connecting economies more effectively by driving down the cost of cross-border settlements and reducing the time to clear payments.

BIS’ Project mBridge would support the use of local currencies in cross-border payments through a multi-CBDC platform with central banks driving the transactions through consensus protocol. Today’s network of banks is constrained by high cost, low speed and complex operations. The platform would enable real-time, peer-to-peer cross-border payments.

Project Mariana, still in its infancy, is an open and composable technology that explores the use of automated market makers to automate foreign exchange.

Eidan said: “From a technology perspective, we have been able to show that you can connect financial institutions across borders in a way that’s safe and secure, that can functionally settle payments instantly. The implications of that are massive.

“With that in mind, it’s not as easy as it seems. When thinking about the reality of why correspondent banking is the way it is, a lot of it is relationship-based. The challenge is enormous.”

With the pilot test completed, it would be possible to have a regional rollout of the mBridge platform within 24 months, said Eidan, but the speed of production would still depend on local governance as not all central banks have the authority to issue digital currencies.

For banks and regulators to be receptive of these technologies, BIS would have to prove that its solutions have better connectivity and liquidity features, as well as more use cases for participants.

 

 

 

 

Keywords: Cash, Digital Wallet, CBDC, Mbridge, Cross-Border Payments, Blockchain, Project Mariana
Institutions: BIS, Central Banks
People : Daniel Eidan

Search

View Past Sessions View all

Image
Ron Shevlin on US banking: “Unprecedented regulatory headwinds make outlook…

In a conversation with Ron Shevlin, a renowned banking thought leader, we delved into how the US banks navigate regulatory challenges amid economic uncertainty and strategic shifts

Image
US fintech status report February 2024

Greg Palmer, head of strategy and host at Finovate conference series, analyses the developments in the US financial industry, highlighting how intense competition for deposits drives the adoption of fintech among banks, and allows digital…

Image
Global banking industry outlook 2024: Navigating complexities and seizing new…

The RadioFinance session on the Global Banking Industry Outlook for 2024 provided deep insights into the challenges and opportunities in the banking sector. Leading economists joined the discussion and focused on economic growth prospects,…

Image
Creating a successful global financial centre

Emmanuel Daniel, founder, TAB Global, spoke at CIFF about Shanghai's goal of becoming a global financial hub and how many legal systems create a flexible business climate.

Image
BCA’s Jahja Setiaatmadja: “Digital and relationship are our two strengths”

Bank Central Asia’s president director, Jahja Setiaatmadja, says that the key drivers of the bank’s success in the Indonesian banking industry are its digital prowess and good relationships with customers. BCA is the highest capitalised…