Raiffeisen Bank International AG (RBI), which is an investment bank in Australia, recently revealed it would be working on a pilot study to test the efficiency of national digital currency. The bank will work with Billion, which is a provider of enterprise DLT solutions, in the pilot scheme.
How the Pilot Project will Work
Billion will issue the digital currency on its blockchain, which underwent a test at the Elevator Lab, a program that is under RBI. The two companies plan to carry out the trial at the end of 2020. In the study, the bank’s institutional and corporate clients will be included.
According to Stefan Andjelic, who is the head of RBI’s blockchain program, Billion is a good example of a fintech that understands how the blockchain can be used in the banking world. He said that during the COVId-19 crisis, it was important that banks work with fintechs to come up with solutions that help their clients with payment processing and liquidity requirements.
Improving the Efficiency of Transactions
The blockchain platform developed by Billion was initially known as RBI Coin. It allows banks to pick a payment method that offers increased speed, more certainty regarding the status of payments, and reduced exception handling. Besides that, it helps to reduce the number of customer inquiries.
The digital transactions within the system will be supplemented with other documents and data. These supplementary documents will include the invoices and the confirmation of where funds come from. It is essential for the creation of an audit trail and full transparency.
There is Already Such a System in Place
JP Morgan, one of the biggest banks in the world, already has a digital currency in active use within its payment ecosystem called the JPM Coin. The bank uses the coin in intra-bank settlements for some of its corporate clients. While the coin has been undergoing trial for months, it has not entered into its mainstream activities to date.
Besides major banks, various central banks are also considering the launch of a digital currency of their own. Various central banks are currently carrying out trials, which could lead to the launch of national digital currencies in the next two to three years.
RBI’s goal appears to be the launch of a digital currency similar to that used by JP Morgan.