Bank of International Settlement (BIS) Innovation Hub has completed an experimental central bank digital currency (CBDC) platform pilot for international settlement with the central banks of Australia, Malaysia, Singapore and South Africa.
The multi-national experimental CBDC project, dubbed Project Dunbar, has been developed to facilitate direct cross-border transactions between financial institutions using multiple currencies connected across multiple central banks.
The joint CBDC pilot was announced in September 2021, and a final report regarding the same was released on Tuesday. The experimental joint CBDC program turned out to be a success and proved financial institutions can use CBDCs issued by central banks to transact directly with each other on a shared platform
The project took several aspects into consideration before developing prototypes. Some of the key issues that the project is trying to solve include resolving cross-border remittance issues in accordance with the regulatory requirements and bringing in key payment infrastructure across national borders.
The project was successful in developing functioning prototypes and demonstrating practical solutions, establishing that the notion of multi-CBDCs was technically realistic. The prototypes proved that the design approaches used to address the three major issues of access, jurisdictional boundaries and governance were effective.
The developers of the project claimed that Project Dunbar illustrated how governance structures enforced by robust technology means can meet important concerns of trust and…