Asian Development Bank Launches Financial Blockchain Project

Asian Development Bank Launches Financial Blockchain Project

Philippine bank ADB plans to introduce a blockchain system for cross-border securities transactions.

The Asian Development Bank is initiating a blockchain project for cross-border securities transactions in the Asia-Pacific region as part of its Digital Innovation Sandbox program. It is reported by Forkast, citing the bank’s press release. 

The project will involve central banks and securities depositories of the Association of Southeast Asian Nations and China, Japan, and South Korea. 

Currently, such transactions are processed by an international network of custodians and correspondent banks located in the US and Europe. Thus, the transaction process takes at least two days. The introduction of the blockchain system enables direct interaction between transaction participants, which significantly increases the speed of transaction processing, reduces transaction costs, and eliminates the risk of improper settlements. 

The project will be implemented in two stages: 

  1. A designing phase, to be completed by the end of March 2022. 
  2. A prototyping phase, scheduled for the second quarter of 2022.

The results of the work will be discussed at the highest level among politicians of ASEAN countries and participants of the Cross-Border Settlement Infrastructure Forum (CSIF).

The project’s technical partners are ConsenSys, Fujitsu, R3 and Soramitsu. Besides, the ADB representatives and the above-mentioned companies are studying CBDCs in the context of their compatibility with the existing banking system and the practicality of the launch as a whole.The Asian Development Bank has been experimenting with blockchain technology for more than a year. For example, in 2020, representatives of the bank and several other financial institutions already conducted the first transaction with a letter of credit using blockchain Contour. In addition, according to an August 2021 Blockdata report, 55 of the top 100 international banks are investing in blockchain technology development and digital assets.

#FinTech news

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