The Bank for International Settlements (BIS) Innovation Hub is to test Central Bank Digital Currencies (CBDCs) with the central banks of Australia, Malaysia, Singapore, and South Africa.

The move, dubbed Project Dunbar and led by the Innovation Hub’s Singapore centre, will develop prototypes for shared platforms that will enable international settlements with digital currencies issued by multiple central banks.

The BIS said that 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.

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, the international dimension of CBDC design, and “support the efforts of the G20 roadmap” for enhancing cross-border payments.

The bank expects the results, due to be published in early 2022, will help inform the development of future platforms for global and regional settlements.

“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,” said Andrew McCormack, centre head of the BIS Innovation Hub. “With this group of capable and passionate partners, we are confident that our work on multi-CBDCs for international settlements will break new ground in this next stage of CBDC experimentation and lay the foundation for global payments connectivity.”

Technical prototypes of the shared platforms, developed in collaboration with different technology partners, will be demonstrated at the Singapore FinTech Festival in November 2021.

“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,” ,” said Sopnendu Mohanty, chief FinTech officer, Monetary Authority of Singapore. "The findings on how a common platform can be governed effectively and managed efficiently will shape the blueprint of the next generation payment systems."

Deputy governor of the South African Reserve Bank (SARB), Rashad Cassim, said that after years of mostly domestic research and exploration, the bank was pleased to see common insights about the need to explore cross-border CBDC payments and interoperability are coming together internationally.

“We are particularly excited to be part of Project Dunbar given the SARB’s role in operating the regional wholesale settlement system in the Southern African Development Community,” he added.

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