The Bank for International Settlements and the central banks of Australia, Malaysia, Singapore and South Africa have developed two prototypes for a shared platform that could enable international settlements using digital currencies issued by multiple central banks.
Led by the BIS Innovation Hub's Singapore Centre, Project Dunbar proved that financial institutions could use CBDCs issued by participating central banks to transact directly with each other on a shared platform. The platform has the potential to reduce reliance on intermediaries and, correspondingly, the costs and time taken to process cross-border transactions.
The project was organised along three workstreams: one focusing on high-level functional requirements and design, and two concurrent technical streams that developed prototypes on the Corda and Partior blockchain platforms.
Andrew McCormack, head of the BIS Innovation Hub Centre in Singapore, says: "A common platform is the most efficient model for payments connectivity but is also the most challenging to achieve. Project Dunbar demonstrated that key concerns of trust and shared control can be addressed through governance mechanisms enforced by robust technological means, laying the foundation for the development of future global and regional platforms."
Michele Bullock, assistant governor, Reserve Bank of Australia, adds: "Allowing entities to directly hold and transact in CBDCs from different jurisdictions could reduce the need for intermediaries in cross-border payments, but it would need to be done in a way that preserves the security and resilience of these payments. While there is clearly more work to be done in thinking about the feasibility and design of multi-CBDC platforms, the findings from Project Dunbar provide a good platform for future work in this area."