While global jurisdictions are progressing with central bank digital currencies, private institutions also work on digitizing national currencies. Raiffeisen Bank International (RBI), a major Austrian bank, is working on a new form of national currency tokenization using blockchain technology.
RBI is extending its collaboration with Polish-British fintech firm, Billon, following a successful test of end-to-end digitized national currency transfers.
RBI Coin is designed to speed up cross-border transactions
As announced on May 18, RBI and Billon are working on initial stages of an RBI tokenization platform, currently dubbed RBI Coin. The pilot is planned to be conducted until late 2020 and is designed to speed up cross-border interbank or intercompany transactions and improve liquidity management, the firms said.
According to the announcement, RBI Coin was developed by Billon as part of RBI-Billon’s previous collaboration, the Elevator Lab program. Reportedly completed on March 5, the Elevator Lab program implements Billon’s blockchain technology to enable e-money transactions with digitized euro.
RBI Coin will be pegged 1:1 to the euro or any other national currency in CEE
If successful, the pilot project is expected to launch in Central and Eastern European (CEE) countries of RBI’s operation, the bank said. Those countries include Belarus, Czech Republic, Poland, Russia and Ukraine, among others.
An RBI spokesperson elaborated to that the bank is still discussing with its subsidiary banks in CEE to determine what banks would participate in the pilot. “We believe the first tests would cover money transfers between Austria and an RBI subsidiary in another CEE country,” the representative said.
Depending on what country is joining the pilot, RBI Coin would be pegged 1:1 to the euro or any other national currency operating in a selected country. The RBI spokesperson person said:
“Currencies deployed would depend on the countries involved in the pilot, so the platform could include euro and other national currencies as well.”
Raiffeisen is actively experimenting with blockchain technology
The news comes after Billon was selected to participate in RBI’s Elevator Lab Partnership Program in November 2019. Within the collaboration, Billon used its blockchain technology to mint, transfer and redeem tokenized euro.
The Elevator Lab Partnership Program is just one example of Raiffeisen’s extensive blockchain and tokenization efforts. In October 2019, RBI participated in the Ivno Global Tokenized Collateral Trial, a token based on R3’s blockchain platform Corda. Previously, RBI’s Russian subsidiary bank developed a blockchain-based platform for settlement by holding firms.