Hong Kong’s financial community backs the digital currency project.

According to the South China Morning Post report, Hong Kong’s financial community has given its backing to a sovereign digital currency project being tested by the central banks of Hong Kong and China, saying they are ready to test cross-border financial payments using the blockchain. mBridge is a digital currency platform being developed by the central banks of Hong Kong, China, Thailand, and the United Arab Emirates.

mBridge could help conduct all foreign exchange transactions in real-time and reduce costs.

“mBridge” – a digital currency platform being developed by the central banks of Hong Kong, China, Thailand, and the United Arab Emirates – could help conduct all foreign exchange transactions in real-time and reduce costs, senior finance executives said at the Treasury Markets Association’s annual summit on Wednesday. Currently, most currency transactions are settled on a “T+2” basis or two days after the trade. But blockchain technology has enabled near real-time settlement as it eliminated all middlemen. 

CBDC can cut processing costs by up to half. 

According to the World Bank, processing fees for cross-border retail fund transfer on average can cost 7% of a transaction’s value, but mBridge can cut that cost by up to half, according to a report released by the four central banks on Tuesday. “With central bank digital currency platforms like mBridge … we can accelerate these foreign exchange payments, making it less costly and more energy-efficient in usage,” said Julien Martin, head of emerging business development markets at Hong Kong Exchanges and Clearing (HKEX), the operator of the city’s stock exchange. Central banks across countries are actively working on their national digital currencies to ward off competition from decentralized and private cryptocurrencies.