A new report informed that Raiffeisen Bank International A.G. has successfully tested an end-to-end digitized national currency transfer by partnering with a blockchain-focused company called Billon. The pilot operates as a part of the bank’s tokenization platform, dubbed RBI Coin, and it should be launched by the end of the year.
Raiffeisen Bank Tests Tokenization Platform
Per the report from earlier today, Billon developed the tokenization platform during the bank’s Elevator Lab program, which concluded on March 5th. The system allows banking organizations to utilize a transfer method that provides more certainty of payment status, increased speed, reduced exception handling, and the ability to decrease customer inquiries.
The success of the testing stages of the digitized national currency transfer allowed both entities to extend the tokenization platform into a full pilot project. It will include selected corporate and institutional clients of the bank, the report explained.
By employing Billon’s Digitized Distributed Cash system, the tokenization platform aims to “demonstrate how companies can improve their liquidity management, speed, and availability of cross-country fund transfers and facilitate new business processes.”
Once it’s launched by the end of 2020, the pilot platform would provide full transparency by supplementing e-money transactions with additional documents or data. At that time, Raiffeisen Bank could deploy the project in CEE (Central and Eastern European) countries where it operates.
While the precise end-to-end benefits will be available upon completion of the pilot, Billon “expects the bank to improve customer experience, differentiate its offering, and achieve process and cost efficiencies in several categories.”
Blockchain And Banking
The report also noted that there’s a growing trend amongst commercial and central banks to develop new blockchain architectures that comply with payment and data regulations. Thus, this new blockchain-based initiative by Billon and Raiffeisen Bank is a step in the right direction, and more similar projects could enter the banking scene soon.
“Billon is a great example of a fintech that understands how to adapt blockchain to serve the needs of banks and their clients. Specifically, during the COVID-19 situation, banks need to partner with fintechs to innovate faster and help clients with payment processing and liquidity needs.” – said Stefan Andjelic, Blockchain Hub Lead at Raiffeisen Bank International.
According to a recent report compiled by the Bank for International Settlements (BIS), physical cash could transmit sorts of viruses, including the COVID-19. Therefore, the paper urged banks to utilize digital methods of payment transactions, including central bank digital currencies (CBDC).