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.
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.
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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