BIS Innovation Hub and the central banks of Australia, Malaysia, Singapore, and South Africa will test the use of central bank digital currencies (CBDCs) for international settlements under a new initiative.
Project Dunbar, led by the Innovation Hub’s Singapore Centre, will develop prototype shared platforms for cross-border transactions using multiple CBCDs.
These multi-CBDC platforms will allow direct transactions between financial institutions in the digital currencies issued by participating central banks, removing the need for intermediaries and reducing the time and cost of transactions.
Multiple partners will work together on the project to develop technical prototypes on different distributed ledger technology platforms.
Different governance and operating designs will also be explored, enabling central banks to share CBDC infrastructures, benefiting from the collaboration between public and private sector experts in different jurisdictions and areas of operation.
The international dimension of CBDC design will be explored by Project Dunbar’s work.
The project will also support the efforts of the G20 roadmap for improving cross-border payments.
Its results, which are expected to be published early next year, will inform the development of future global and regional settlements platforms.
“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, head of the BIS Innovation Hub Centre in Singapore.
“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.”