Sky Guo, founder of the Cypherium blockchain, predicts that cross-border payments for central bank digital currencies will occur „in the next two years“ or „even earlier“.
In an interview with Cointelegraph July 13, Guo said the development of CBDCs among central banks makes it likely that certain European Union countries, China and the United States, will take the lead and experiment with cross-border payments sooner than expected.
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Cross-border challenges of CBDCs
Countries around the world are experimenting with CBDC pilots at the national level, such as the giant Didi, which has signed a „strategic partnership“ with the People’s Bank of China’s Digital Currency Research Institute. Therefore, exploring cross-border payment with other CBDCs is inevitable, according to Guo.
However, Guo also noted that countries are approving CBDCs differently and using different systems and technology. Unless interoperability issues between chains can be resolved, barriers such as interaction with various payment systems could prevent the global adoption of CBDCs. He added that:
„CBDCs generally fall into two categories: retail and wholesale. Retail CBDCs are used for day-to-day purchases and wholesale CBDCs for bank-to-bank transactions that have little traffic.
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There is a solution
Guo told Cointelegraph that the Crypto Cash blockchain, which is a combination of working test (PoW) and HotStuff consensus algorithms, has already developed an inter-string interoperability solution for CBDCs.
As one of the founding members of the OMFIF’s Digital Monetary Institute, Guo has also participated in several virtual roundtables with De Nederlandsche Bank, the European Central Bank, the Bank of France, the People’s Bank of China’s Digital Currency Research Institute and others.
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As Cointelegraph reported earlier, OMFIF, a global think tank for central banking, has announced the launch of the Digital Money Institute, aimed at supporting the closing of the gap between digital currencies and traditional banking.