CBDC, also central bank digital currency, is a digital token issued by a country. Many governments and central banks around the world are exploring the use of CBDCs. Even though they mostly remain in the hypothetical stage. However, more than 80% of central banks are looking at digital currencies.
The Reserve Bank of Australia announced on Thursday that it would join forces with the Central Banks of Malaysia, Singapore, and South Africa. This partnership, called Project Dunbar, aims to test the use of central bank digital currencies (CBDC) for international settlements.Project Dunbar: Testing Cross-Border Payments With CBDCs
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 conduct a cross-border payments trial using different central bank digital currencies (CBDC).
This trial will assess if the CBDC makes transactions settlements cheaper and easier. The BIS Innovation Hub’s Singapore Centre is leading the project. These multi-CBDC platforms will enable financial institutions to transact directly in the digital currencies issued by participating central banks. Consequently, eliminating the need for intermediaries and cutting the time and cost of transactions.Total crypto market rises to $2.3 Trillion | Source: Crypto Total Market Cap from TradingView.com
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 allow central banks to share CBDC infrastructures. This access enables it to benefit from the collaboration between public and private sector experts in different jurisdictions.
Project Dunbar’s work will explore the international dimension of CBDC design. It will also support the efforts of the G20 roadmap for enhanc...