Australia, Singapore, Malaysia, and South Africa join hands on a collaborative CBDC experiment

• The combined endeavor will develop shared DLT platforms that will allow institutions to settle cross-border transactions using digital currency issued by central banks
• Project Dunbar will be implemented in collaboration with the Bank for International Settlements (BIS) Innovation Hub, which is based in Singapore
• Michele Bullock, Assistant Governor of the Reserve Bank of Australia (RBA), said that the enhancement of cross-border payments has become a priority for the international regulatory community and that the RBA is very focused on the issue in its domestic policy work

The combined endeavor will develop shared DLT platforms that will allow institutions to settle cross-border transactions using digital currency issued by central banks. Australia’s, Singapore’s, Malaysia’s, and South Africa’s central banks have announced a cooperative endeavor to test international settlements using digital currencies issued by central banks (CBDCs). 

Project Dunbar will test shared systems that will allow direct transactions between institutions utilizing digital currencies issued by a variety of central banks. The results of the pilot will be used to inform the creation of global and regional platforms, as well as to help the G20’s cross-border payments strategy.

Project Dunbar will be implemented in collaboration with the Bank for International Settlements (BIS) Innovation Hub, which is based in Singapore. Multiple partners will be involved in the initiative, which will construct various DLT platforms and investigate various architectures that would allow central banks to share CBDC infrastructure. 

The efficiency gains associated with distributed ledger technology (DLT)-based payments are highlighted in a joint announcement, which states that these multi-CBDC platforms will enable financial institutions to deal directly with one another in digital currencies issued by participating central banks, removing the need for intermediaries and shortening transaction times and costs.

Michele Bullock, Assistant Governor of the Reserve Bank of Australia (RBA), said that the enhancement of cross-border payments has become a priority for the international regulatory community and that the RBA is very focused on the issue in its domestic policy work. 

Project Dunbar brings together central banks with years of expertise and distinct perspectives in CBDC projects, as well as ecosystem partners at advanced levels of technological development on digital currencies,” said Andre McCormack, the BIS Innovation Hub Singapore Centre’s director. 

They are optimistic that their work on multi-CBDCs for international settlements will break new ground in the next stage of CBDC experimentation and create the groundwork for global payments connectivity with this collection of capable and committed partners. 

The RBA, on the other hand, has continually dismissed the necessity for a domestic CBDC, noting the success of the New Payments Platform, which allows for rapid digital transactions 24 hours a day, seven days a week. At the Singapore FinTech Festival in November, Project Dunbar is anticipated to demonstrate technical prototypes of shared DLT platforms. The program plans to release its entire report in early 2022.

Ritika Sharma

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.