Central Banks of Australia, Malaysia, Singapore, and South Africa set to test joint cross border CBDC
On Thursday there was a
declaration of a partnership, called Project Dunbar from the Reserve Bank of
Australia on joining forces with the Central Banks of Malaysia, Singapore, and
South Africa to test the use of central bank digital currencies (CBDC) for
international settlements that will enable global payment connectivity.
This cross-border payment trial will be led by the Bank for International Settlements Innovation Hub. The Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore, and South African Reserve Bank will get involved in this project. It will work with multiple partners to develop technical prototypes on different distributed ledger technology platforms. The project will aim to reduce the time and cost of transactions using this platform. Also see if the need for intermediaries can be removed.
The financial institutions can transact directly with each other in the digital currencies through these multi-CBDC platforms. Different governance and operating designs will be explored that would allow central banks to share CBDC infrastructures. Multiple partners will develop different distributed ledger technology (DLT) platforms. This access enables it to benefit from the collaboration between public and private sector experts in different jurisdictions. In addition to supporting the G20’s roadmap for improving cross-border payments, the findings will be used to inform the “development of global and regional platforms”. Around 80% of central banks are looking at digital currencies.
In November of this year Project Dunbar is expected to demonstrate technical prototypes of shared DLT platforms at the Singapore FinTech Festival. In early 2022 BIS are planning to publish its complete findings. According to RBA the New Payments Platform will be a success one as it will allows instant digital transfers 24-hours a day.
Head of the BIS Innovation Hub Singapore Centre Andre 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,”
CBW - External Analyst