Project Dunbar aims to develop prototypes for platforms for cross-border transactions using digital currencies issued by central banks
Reserve Bank of Australia in Canberra, Australia. (Credit: Bidgee/Wikipedia.)
Bank for International Settlements (BIS) Innovation Hub, the Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore and South African Reserve Bank have partnered to test the use of central bank digital currencies (CBDCs) for international settlements.
Led by the BIS Innovation Hub’s Singapore centre, Project Dunbar aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs.
The multi-CBDC platforms are said to enable financial institutions to transact directly with each other in the digital currencies issued by participating central banks.
Also, the platforms would eliminate the need for intermediaries and reduces the time and cost of transactions.
BIS Innovation Hub Singapore centre head Andrew McCormack said: “Project Dunbar brings together central banks with years of experience and unique perspectives in CBDC projects and ecosystem partners at 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 settlements will break new ground in this next stage of CBDC experimentation and lay the foundation for global payments connectivity.”
Project Dunbar is designed to work with multiple partners to develop technical prototypes on different distributed ledger technology platforms.
It will explore various designs that enable central banks to share CBDC infrastructures, based on collaboration between public and private sector experts in different fields.
Also, the project is anticipated to explore the international aspects of the CBDC design and support the efforts of the G20 roadmap for enhanced cross-border payments.
Results of the experiment, to be published in early 2022, would inform the development of future platforms for global and regional settlements.
BIS Innovation Hub intends to present the technical prototypes developed together with partners at the Singapore FinTech Festival in November 2021.
Reserve Bank of Australia Assistant Governor Michele Bullock said: “We are pleased to collaborate with the BIS Innovation Hub and the central bank partners on this important initiative to explore how a shared platform for multiple CBDCs could be used to improve the speed, cost and transparency of wholesale cross-border transactions.
“Enhancing cross-border payments has become a priority for the international regulatory community and something that we are very focused on in our domestic policy work.”
In July this year, BIS Innovation Hub Singapore Centre and the Monetary Authority of Singapore published a proposed blueprint for enhancing global payments network connectivity.