The Bank of International Settlements (BIS) is partnering with four financial institutions to develop central bank digital currencies (CBDCs).
In a new report, the BIS introduced Project Dunbar to focus on how a shared platform incorporating several CBDCs could help make international payments “faster and safer.”
“Project Dunbar explores how a common platform for multiple central bank digital currencies (multi-CBDCs) could enable cheaper, faster and safer 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 discussed three important challenges in settling international transactions through a common forum. The premier challenge concerns platform access to CBDCs, such as who will have that access and where. The second challenge involves cross-border payment simplification in accordance with local regulations, which differ from country to country. The third challenge involves developing a fair governance system that respects an individual country’s national security while allowing the sharing of financial information.
Says Bank Negara Malaysia Assistant Governor Fraziali Ismail of the project,
“The successful completion of Project Dunbar has produced meaningful insights on how a multi-CBDC platform may potentially solve complex issues in the cross-border payment space. The project is a testament to the importance of central bank collaboration in supporting the development of next-generation payment infrastructures. We intend to carry these insights through other proofs-of-concept as we continue our CBDC exploration journey.”
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