It seems the prospect of nations taking their digital currency projects from domestic to international levels is being realised faster than earlier scheduled, this is evident with the Bank for International Settlements Innovation Hub, the Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore and South African Reserve Bank all joining forces to test the use of central bank digital currencies (CBDCs) for international settlements.
Led by the Innovation Hub’s Singapore Centre, Project Dunbar aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs. These multi-CBDC platforms will allow financial institutions to transact directly with each other in the digital currencies issued by participating central banks, eliminating the need for intermediaries and cutting the time and cost of transactions.
The project will work with multiple partners to develop technical prototypes on different distributed ledger technology platforms. It will also explore different governance and operating designs that would enable central banks to share CBDC infrastructures, benefitting from the collaboration between public and private sector experts in different jurisdictions and areas of operation.
Project Dunbar’s work will explore the international dimension of CBDC design and support the efforts of the G20 roadmap for enhancing cross-border payments. Its results, expected to be published in early 2022, will inform the development of future platforms for global and regional settlements. Technical prototypes of the shared platforms, developed in collaboration with different technology partners, will be demonstrated at the Singapore FinTech Festival in November 2021.
“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” said Andrew McCormack, Centre Head of the BIS Innovation Hub Singapore Centre.
“Enhancing cross-border payments has become a priority for the international regulatory community and something that we are also very focused on in our domestic policy work,” said Michele Bullock, Assistant Governor (Financial System), Reserve Bank of Australia.
“We hope the project will spur greater public-private collaboration to enable fast and frictionless cross-border payments, combining both the benefits of distributed ledger technology and the efficiency of a common platform,” said Assistant Governor Fraziali Ismail, Bank Negara Malaysia.
“Project Dunbar’s work on using multi-CBDC platforms to facilitate seamless multi-currency fund transfers is a significant contribution to the global vision to make payments cheaper and faster” said Sopnendu Mohanty, Chief FinTech Officer, Monetary Authority of Singapore.
“After years of mostly domestic research and exploration, we are very pleased to see that these common insights about the need to explore cross-border CBDC payments and interoperability are coming together internationally” said Deputy Governor Rashad Cassim, South African Reserve Bank.
