TechFlow news — The Bank for International Settlements (BIS) and four national central banks announced on Thursday a joint effort to develop a prototype platform supporting international settlements using multiple central bank digital currencies (CBDCs).
The BIS Innovation Hub, the Reserve Bank of Australia, the Central Bank of Malaysia, the Monetary Authority of Singapore, and the South African Reserve Bank said Tuesday they had completed development of the platform. They stated that it demonstrates how financial institutions could directly transact with each other using CBDCs issued by participating central banks.
In a statement, the group said the platform, named "Project Dunbar," has the potential to reduce reliance on intermediaries and lower the cost and time involved in processing cross-border transactions.
During the platform's development, they addressed issues such as which entities should be permitted to transact using CBDCs and how to reconcile differences in payment regulations across countries.
Andrew McCormack, Head of the BIS Innovation Hub in Singapore, said: “Project Dunbar shows that key issues around trust and shared control can be addressed through robust technical governance mechanisms, laying the foundation for future global and regional platforms.”
He also noted that enabling entities from different jurisdictions to directly hold and use CBDCs for transactions may reduce the need for intermediaries in cross-border payments, but this must be achieved in a way that safeguards the security and resilience of these payments.
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