Joint CBDC pilot unites Australia, Singapore, Malaysia and South Africa

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Central banks across South Africa, Australia, Singapore, and Malaysia have unveiled joint proposals for a trial of central bank digital currencies, with a focus on international settlements.

The reserve banks in each country have teamed up on the project, known as Project Dunbar, which will trial a new platform for enabling cross-border transfers between each other, denominated in a central bank digital currency. The results from the trial will be used as part of the “development of global and regional platforms,” running alongside the G20 roadmap for streamlining international payments.

Project Dunbar is being run through the Bank for International Settlements Innovation Hub in Singapore, bringing together multiple partners to build out a viable DLT-powered solution for handling these functions.

In a statement published jointly on behalf of the participating central banks, the consortium said it would be looking to achieve efficiencies through smoother blockchain-powered payments.

“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.”

Andre McCormack, head of the BIS Innovation Hub Singapore Centre, predicted the project would break new ground as the world moves increasingly towards CBDCs.

“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. 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.”

The development comes at a time of increasing work with CBDCs at central banks worldwide, as they look to take maximum advantage from the emergence of supporting technologies and infrastructure.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

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