Central Bank of Italy and South Korea Strike CBDC Partnership on IT and Payment Systems
The Central Bank of Italy and South Korea have announced a partnership to collaborate on key areas like payment systems and IT in the development of Central Bank Digital Currencies (CBDCs).
A Dec 5 press release by La Banca d’Italia disclosed the agreement which would see both central banks follow the terms of a Memorandum of Understanding (MoU) aimed at strengthening both IT and payment systems of both countries’ digital currencies.
“The Bank of Italy and the Bank of Korea have signed a Memorandum of Understanding aimed at strengthening collaboration on IT and payment systems.”
The terms of the MoU stress on mutual sharing of knowledge gathered from the extensive research both institutions have embarked on in recent years. All topics on Information Communication Technology and real-time payment and settlement integrations will also be shared by both countries.
Per the statement, Luigi Federico Signorini the General Director of the Bank of Italy participated in the memorandum and signed the protocol.
CBDC collaborations across borders
A major key point in rolling out CBDCs by several governments has been getting cross-border payments as a way to rival private cryptocurrencies and connect different continents and regions without stress on the part of consumers.
Another technological issue being researched across many central banks is the privacy implications of a CBDC rollout with several governments backing a model that gives private corporations more powers while ensuring the safety of user data.
Recently, the Bank for International Settlements (BIS) published a report on Project Tourbillon, a research done on ensuring CBDC transactions are done with the highest privacy standards through technology integrations.
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The project releases two models; eCash 1.0 and eCash 2.0 meant to ensure the standards of privacy transactions without compromising security and scalability even at peak periods across countries.
“Project Tourbillon introduces a new privacy paradigm that balances user needs and public policy objectives: payer anonymity. For example, a consumer who pays a merchant using CBDCs does not disclose personal information to anyone, including the merchant, banks, and the central bank.”
Italy and Korea scale up digital currency efforts
Italy has been researching modern solutions to settle distributed ledger technology (DLT) transactions while looking to introduce the Markets in Crypto Assets (MiCA) legislations in the country in line with the uniform objectives of the European Union (EU) and to protect investors.
Meanwhile, the Bank of Korea has unveiled plans to onboard 100,000 citizens to purchase items and make deposits in line with its planned CBDC pilot billed for September to October 2024.
“The pilot project will be conducted first in the fourth quarter of 2024. The possibility of conducting separate pilots will be considered as well if banks propose new individual projects.”