BIS Innovation Hub, central banks of 4 nations to test CBDCs

04 Sep '21

2 min read

Pic: BIS Innovation Hub

The Bank for International Settlements (BIS) Innovation Hub, the Reserve Bank of Australia, the Bank Negara Malaysia, the Monetary Authority of Singapore and the South African Reserve Bank will join hands to test the use of central bank digital currencies (CBDCs) for international settlements. Switzerland-based BIS is an international financial institution owned by central banks.

Led by the Innovation Hub's Singapore centre, Project Dunbar aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs.

These multi-CBDC platforms 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, BIS said in a press release.

The project will work with multiple partners to develop technical prototypes on different distributed ledger technology platforms. It will also explore different governance and operating designs that would enable central banks to share CBDC infrastructures, benefitting from the collaboration between public and private sector experts in different jurisdictions and areas of operation.

Project Dunbar's work will explore the international dimension of CBDC design and support the efforts of the G20 road map for enhancing cross-border payments. Its results, expected to be published in early 2022, will 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 2021.

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