Australia, Singapore, Malaysia, And South Africa Launch Joint CBDC Pilot

Australia’s, Singapore’s, Malaysia’s, and South Africa’s central banks have announced a cooperative endeavour to test international settlements using digital currencies issued by central banks (CBDC).

Project Dunbar will test shared systems that will allow direct transactions between institutions utilising digital currencies issued by a variety of central banks. The results of the pilot will be used to inform the “creation of global and regional platforms,” as well as to help the G20’s cross-border payments strategy.

Project Dunbar will be implemented in collaboration with the Bank for International Settlements (BIS) Innovation Hub, which is based in Singapore.The project will engage multiple partners to develop different distributed ledger technology (DLT) platforms and explore different designs that would enable central banks to share CBDC infrastructure.

The four central banks will collaborate on the development of technical prototypes on various distributed ledger technology platforms as part of their new effort. The alliance will also evaluate governance and operating frameworks to allow central banks to share CBDC infrastructure across jurisdictions and modes of operation.

Why The CBDC Has Been Launched:

•  “If (advanced economies’) real interest rates rise and commodities fall, Brazil will be hurt, but it shouldn’t be enough to fully derail things,” he added. Chile’s Central Bank raised its forecast for GDP growth in 2021 from 8.5 percent to 9.5 percent to 10.5 percent to 11.5 percent, citing the country’s “rapid recovery” from the COVID-19-induced recession.

• The Reserve Bank of Australia, Bank Negara Malaysia, the Monetary Authority of Singapore, the South African Reserve Bank, and the Bank of International Settlements’ Innovation Hub, which is leading the scheme, said in a statement that the latest project aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs.

• These platforms would allow financial institutions to conduct CBDC transactions directly with one another, eliminating the need for middlemen and reducing transaction time and cost.

• Project Dunbar brings together central banks with years of expertise and distinct insights in CBDC initiatives, as well as ecosystem partners at advanced phases of digital currency technological development .

We are sure that our work on multi-CBDCs for international settlements will pave the way for global payments connectivity in this next stage of CBDC experimentation.

The Reserve Bank of Australia, Bank Negara Malaysia, the Monetary Authority of Singapore, the South African Reserve Bank, and the Bank of International Settlements’ Innovation Hub, which is leading the scheme, said in a statement that the latest project aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs.

• These platforms would allow financial institutions to conduct CBDC transactions directly with one another, eliminating the need for middlemen and reducing transaction time and cost.
• CBDCs, which are digital versions of existing currencies, are being investigated by a number of governments and central banks around the world. Some countries, such as China, are testing retail-focused CBDCs to mimic cash in circulation, while others are considering utilising so-called wholesale CBDCs to better their financial systems’ internal workings.

According to Bank Negara Malaysia assistant governor Fraziali Ismail, “the multi-CBDC shared platform examined under Project Dunbar has the potential to leapfrog legacy payment arrangements and serve as a foundation for a more efficient international settlement platform.”

“We expect that by combining the benefits of distributed ledger technology with the efficiency of a shared platform, the initiative will drive increased public-private collaboration to enable rapid and frictionless cross-border payments.”

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