Four central banks will launch digital currency prototypes in partnership with the Bank for International Settlements

The Bank for International Settlements (BIS) is partnering with four financial institutions to develop Central Bank Digital Currencies (CBDCs).

In a new report, the BIS introduced the Dunbar project to focus on how a shared platform incorporating multiple CBDCs could help make international payments “faster and more secure”.

“The Dunbar Project explores how a common platform for multiple central bank digital currencies (multi-CBDC) could enable cheaper, faster and more secure cross-border payments.

The project is a collaboration between the Bank for International Settlements (BIS) Innovation Hub Singapore Centre, the Reserve Bank of Australia, Bank Negara Malaysia, the Monetary Authority of Singapore and the South African Reserve Bank.

The announcement addressed three significant challenges in settling international transactions through a common forum. The main challenge relates to access to CBDC platforms, for example who will have this access and where. The second challenge concerns the simplification of cross-border payments in accordance with local regulations, which differ from country to country. The third challenge is to develop an equitable governance system that respects each country’s national security while allowing for the sharing of financial information.

Said Deputy Governor of Bank Negara Malaysia Fraziali Ismail of the project,

“The successful completion of the Dunbar project has yielded significant insights into how a multi-CBDC platform can potentially solve complex issues in the cross-border payment space. The project demonstrates the importance of central bank collaboration to support the development of next-generation payment infrastructures. We intend to pass this information on through further proofs of concept as we continue our journey of CBDC exploration.

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Featured Image: Shutterstock/Digital Store/Natalia Siiatovskaia

Sylvia B. Polson