Project Dunbar: international settlements using multi-CBDCs
The Bank for International Settlements Innovation Hub has announced that it is working with the central banks of four countries, namely Singapore, Australia, Malaysia, and South Africa, to test and develop prototype shared platforms for cross-border transactions using multiple central bank digital currencies (“CBDCs”), allowing financial institutions to transact directly with each other in the digital currencies, eliminating the need for intermediaries and cutting the time and cost of transactions.
The project will focus initially on the development of a common platform for multi-CBDC settlement (Model 3 – mCBDC arrangements based on single multi-currency system) that fulfils the needs and requirements of central banks and financial institutions.
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, benefitting from the collaboration between public and private sector experts in different jurisdictions and areas of operation.
This work will explore the international dimension of CBDC design and support the efforts of the G20 roadmap for enhancing cross-border payments. Its results, expected to be published in early 2022, will inform the development of future platforms for global and regional settlements.