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ADB to link Asean+3 central banks
MANILA, Philippines — Manila-based Asian Development Bank (ADB) will make use of blockchain technology to link central banks and securities depositories in the ASEAN+3 region.
In a statement, ADB said its latest project targets to make cross-border securities transactions in Asia and the Pacific more efficient and secure through the use of blockchain technology.
The multilateral lender will work with blockchain companies to develop ways to directly connect central banks and securities depositories in the ASEAN+3 region within a blockchain network.
The region consists of the 10-member ASEAN economies plus Japan, China and Korea.
ADB is partnering with Brooklyn-based software company ConsenSys, Japanese multinational information and communications technology firm Fujitsu Ltd., technology provider R3 Ltd., and Tokyo-based Soramitsu.
The technology firms will examine systems interoperability and the viability of central bank digital currencies in the region.
ADB said directly connecting the institutions within a blockchain network could reduce both transaction costs and settlement risks or the possibility that securities are not exchanged within an agreed time frame.
Currently, cross-border securities transactions in the region are processed through a global network of custodians and correspondent banks, which go through global centers in either the US or Europe.
This means that intra-regional transaction settlements in ASEAN+3 take at least two days due to time differences as well as varying operating hours for markets within the same time zone.
ADB said the project will include a designing phase to be completed by the end of March and a prototyping phase to be done by the second quarter of the year.
The results will then be discussed with ASEAN+3 government officials and members of the Cross-Border Settlement Infrastructure Forum of the Asian Bond Markets Initiative, made up of central banks and securities depositories from across the region.
ADB’s project is supported by its Digital Innovation Sandbox program, a platform for partners across the public and private sectors to collaborate on digital solutions.
Source: https://www.philstar.com/business/2022/01/27/2156548/adb-link-asean3-central-banks