Bank for International Settlements (BIS) Innovation Hub, Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore and South African Reserve Bank have collaborated to test the use of central bank digital currencies (CBDCs) for international settlements.
Revolution in sight?
Led by Singapore's BIS Innovation Hub, Project Dunbar aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs.
Multi-CBDC platforms are said to allow financial institutions to transact directly with each other in digital currencies issued by participating central banks.
Furthermore, the platforms would eliminate the need for intermediaries and reduce the time and cost of transactions.
Head of BIS Innovation Hub Singapore Andrew McCormack said, “The Dunbar project brings together central banks with years of experience and unique perspectives in CBDC projects and ecosystem partners in advanced stages of technical development on digital currencies.
"With this group of capable and passionate partners, we are confident that our work on multi-CBDCs for international agreements will open new horizons in this next phase of the CBDC trial and lay the foundation for global payments connectivity."
What the project consists of
Project Dunbar is designed to work with multiple partners to develop technical prototypes on different distributed ledger technology platforms.
It will explore various projects that allow central banks to share CBDC infrastructures, based on collaboration between public and private sector experts in different fields.
In addition, the project is expected to explore the international aspects of CBDC design and support the efforts of the G20 roadmap to improve cross-border payments.
The results of the experiment, which will be published in early 2022, will inform the development of future platforms for global and regional settlements.
BIS Innovation Hub intends to present the technical prototypes developed together with the partners at the Singapore FinTech Festival in November 2021.
Assistant Reserve Bank of Australia Governor Michele Bullock said, “We are delighted to work with the BIS Innovation Hub and central bank partners on this important initiative to explore how a shared platform for multiple CBDCs could be used to improve speed. , the costs and transparency of wholesale cross-border transactions.
"Improving cross-border payments has become a priority for the international regulatory community and something we are very focused on in our domestic policy work."
In July this year, the BIS Innovation Hub Singapore Center and the Monetary Authority of Singapore released a project proposal to improve the connectivity of the global payments network.
What do you think of it? Are banks really preparing to mint their own CBDCs? Let us know in the comments section below.
