Central Bank Digital Currency Cross-Border Payment Model Based on Blockchain Technology

Abstract Since the turn of the twenty-first century, the growth of the globalized economy and trade has accelerated, and the cross-border payment system, which is an essential component of the international financial infrastructure, has played a significant role in the global economy and trade. However, traditional cross-border payments present risks and challenges, such as expensive processing fees, limited payment efficiency, information asymmetry in the trade process, and reliance on a highly centralized cross-border payment system. This chapter is based on consortium blockchain technology and utilizes Polkadot’s Parachain, Relay chain, and cross-chain technologies as references; a scalable, high-efficiency, high-security, and privacy-protecting central bank digital currency cross-border payment model is designed. Analyzed the usage of hash digest technology and CoinJoin technology to avoid the tracing of transactions in order to protect privacy. The issuance of multi-country central bank digital currency or stablecoin anchored to a basket of fiat currencies is discussed as the currency in circulation in the model. Finally, the central bank digital currency cross-border payment development trend is summarized and forecasted.