CBDC Intermediaries to be Eliminated in Project Icebreaker


There’s been a lot of chatter around wCBDCs lately, particularly as it relates to retail—that is—replacing consumer and small business cash on hand with centrally controlled digital money for daily use in domestic commerce and various other transactions. 

By and large, that remains the debate in the U.S. vis-à-vis the digital dollar and how/who might manage that whole thing, from the perspective of consumer privacy et al. This particular posting from CoinGeek takes a different approach on retail CBDC, which is the cross-border version of it. One might logically conclude that remittance is the main objective, but surely other commercial activity comes into play. The initiative mentioned, called Project Icebreaker, is between the central banks of Israel, Sweden and Norway. We’ve been tracking developments in CBDCs (of all types) and other cross-border payments initiatives, mostly from the B2B use perspective, where high value gross transactions in the trillions are an everyday occurrence.

Although pieces like this are always lacking in detail—one would have to get the inner IT circle in a huddle to really understand how these systems are developed and tested—the idea is to eliminate the ‘intermediaries’ on typical cross-border transactions (e.g.; banks, MTOs, currency exchanges, etc.) in order to create atomic settlement (blockchain-based and instant) between two or more currencies. In this case, it’s on behalf of two individuals, a consumer and a business, or even a C2G scenario. 

The CoinGeek article claims that this effort between the central banks has been underway for roughly 16 months and has had experimental success, although that is the extent of the detail. There is a bit more discussion around risks and the mix of private and public participation in the end game, so more of the same as we hear about these various ongoing initiatives. We expect to be posting many more of these as multiple entities and combinations thereof continue lining up (mostly you don’t hear about them until you do) to try their version(s).

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.


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