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Raiffeisen Bank International (RBI), a major Austrian bank, has confirmed that it is expanding its collaboration with Billon, a Polish-British fintech to create an RBI Coin.
Raiffeisen Bank International (RBI), a major Austrian bank, has confirmed that it is expanding its collaboration with Billon, a Polish-British fintech. This partnership is meant to help in the development of a new type of DLT-based national currency tokenization. Private institutions and tech giants are also working on digitizing national currencies even as global authorities are progressing with the development of central bank digital currencies (CBDCs).
In that context, RBI is working hard, aiming to create a new form of national currency tokenization. Officials say that the new currency will be powered by blockchain technology. The extension of the collaboration with Billon comes after a successful test of the end-to-end digitized national currency transfers.
The RBI Coin is designed perfectly to speed up cross-border transactions. On May 18, RBI and Billon announced that they are working on the preliminary stages of an RBI tokenization platform. This pilot project is scheduled to be conducted late in 2020 and is well designed to speed up cross-border inter-bank or inter-company transactions. The RBI Coin is also expected to boost liquidity management according to the firms.
According to the announcement, the RBI Coin was designed and developed by Billon as a part of RBI-Billon’s previous collaboration. The last collaboration was referred to as the Elevator Lab program.
How Raiffeisen Digital Currency Will Work
Official reports from Raiffeisen say that the digital currency RBI Coin will be pegged 1:1 to the Euro or any other national currency within Central and Eastern European (CEE) countries. If it turns out successful, the pilot project might launch in the CEE region where RBI’s operations are concentrated. These countries include Poland, Belarus, Ukraine, Russia, the Czech Republic, among others.
The bank is still in discussions with its subsidiary banks in the CEE, as explained by one RBI spokesperson. The representative said that RBI is still in the process of determining what banks will participate in the project, adding:
“We believe the first tests would cover money transfers between Austria and an RBI subsidiary in another CEE country.”
The RBI Coin might be pegged 1:1 to the Euro or any other national currency operation in a particular jurisdiction depending on what country agrees to join the pilot.
RBI is currently experimenting with blockchain technology actively. The latest news comes after Billon was chosen to become an active participant in RBI’s Elevator Lab Partnership Program in November 2019. Within that collaboration, Billon utilized its blockchain network to mint, transfer, and redeem tokenized Euro.
The Elevator Program is an example of Raiffeisen’s plans to use the blockchain and tokenization. RBI was a participant in the Ivno Global Tokenized Collateral Trial that took place in October 2019. The Trial was a token project based on R3’s blockchain platform Corda.
Earlier, RBI’s Russian subsidiary bank created a blockchain-based platform for settlement by the holding firms.