Nocashevents Project Dunbar: international settlements using multi-CBDCs

Project Dunbar: international settlements using multi-CBDCs

Project Dunbar will develop prototypes for shared platforms that will enable international settlements with digital currencies issued by multiple central banks. System aims to allow direct transactions between institutions, reducing costs and increasing speed.

The Bank for International Settlements Innovation Hub, the Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore, and South African Reserve Bank will join forces to test the use of central bank digital currencies (CBDCs) for international settlements, according to a press release..

Led by Innovation Hub’s Singapore Centre, it aims to develop prototype shared platforms for cross-border transactions using multiple 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.

Project Dunbar’s 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. Technical prototypes of the shared platforms, developed in collaboration with different technology partners, will be demonstrated at the Singapore FinTech Festival in November 2021.