Singapore has joined forces with the central banks of Australia, Malaysia, and South Africa, along with the Bank for International Settlements (BIS) Innovation Hub, to test the use of central bank digital currencies (CBDCs) for international settlements.
Project Dunbar aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs. This 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 joint release read.
The project, which will be led by the Innovation Hub’s Singapore Centre, will also explore different governance and operating designs that would enable central banks to share CBDC infrastructures.
The results of the project are expected to be published in early 2022 and should 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.
“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. The findings on how a common platform can be governed effectively and managed efficiently will shape the blueprint of the next generation payment systems,” said Sopnendu Mohanty, chief fintech officer, Monetary Authority of Singapore.