The central banks of Australia, Singapore, Malaysia and South Africa have started a joint initiative, Project Dunbar, to examine international settlement using central bank digital currencies (CBDCs), according to an announcement.
This project will mock up shared platforms allowing direct transfers between institutions using digital currencies issued by multiple central banks. The information collected through the project would be used to notify the “development of global and regional platforms.”
The four countries will execute this project in partnership with the Bank for International Settlement (BIS) Innovation Hub.
The countries initiating this project would be building different DLT platforms and examine different designs, which could allow central banks to share CBDC infrastructure.
The joint announcement discusses the efficiency savings linked with DLT-based payment, noting: “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.”
Michele Bullock, the Assistant Governor of the Reserve Bank of Australia (RBA), in his statement has mentioned that presently, the main focus of the international regulatory community is to enhance the cross-border payment system.
While talking about Project Dunbar, Andre McCormack, the head of the BIS Innovation Hub Singapore Centre, stated, “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.”
He further stated that this project will break new ground in the next stage of CBDC experimentation and lay the foundation for global payments connectivity.