Singapore, Malaysia, Australia in cross-border CBDC pilot
04:36, 3 September 2021
The Bank of International Settlement (BIS) alongside central banks from Singapore, Malaysia, Australia and South Africa are teaming up to test the interoperability of multiple central bank digital currency (CBDC) aimed at making cross-border settlements more efficient.
The initiative, called Project Dunbar, “aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs. These multi-CBDCs 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,” a joint statement reads.
In a March paper, the Swiss-based BIS said that benefits of multi-CBDCs platform “are especially relevant for emerging market economies poorly served by the existing correspondent banking arrangement.”
Pilot result in early 2022
The try out result is expected to come in early 2022, providing guidance for future developments on global and regional settlements.
The project will involve public and private sector experts to explore different operating designs, governance standards, and various ledger technology platforms.
Technical prototypes of the shared platforms, developed in collaboration with different technology partners, will be demonstrated at the Singapore FinTech Festival in November.
Number of Asian retail CBDCs
In the said festival, developers will also be challenged to present ideas to develop retail CBDC, Singapore’s central bank said in a separate statement.
The Monetary Authority of Singapore on 30 August named 15 finalists to compete in the festival, ranging from household names of IBM and HSBC to financial technology firms such as Bitt and Xfers.
Other countries in Asia looking at introducing a retails CBDC include the Kingdom of Bhutan, Laos a number of Pacific Islands, while Cambodia's digital bakong was launched in 2020.
China is pushing ahead with its plans for a digital yuan, while in June Taiwan announced that it was piloting retail and wholesale CBDCs.
Japan, however, recently dropped plans for a retail CBDC following a lack of interest from the general public.
