According to a report on Monday, the Bank for International Settlements (BIS), an organization that unites the world's central banks, has suggested that the cross-border payment model for retail CBDC, explored in Project Icebreaker, offers benefits for both banks and retail customers. Project Icebreaker, conducted with the help of central banks from Israel, Norway, and Sweden, used a "hub-and-spoke" method to connect national CBDC systems, allowing central banks to retain control over their CBDC while allowing competitive quotes for the exchange rate.
The BIS said that the model could reduce settlement and counterparty risk by using coordinated payments in central bank money, and complete cross-border transactions within seconds. However, for the model to work, every CBDC system involved needs to operate 24/7 and have a hash time-locked contract. The BIS has previously conducted other CBDC cross-border experiments, such as Project Dunbar, which focused on wholesale use.