The BIS Innovation Hub, together with the central banks of Australia, Malaysia, Singapore and South Africa, has developed two prototypes of a platform for cross-border payments using multiple CBDCs.
Project Dunbar scoped out three key challenges of implementing a multi-CBDC platform across central banks – access, regulation compatibility, and governance – and proposed practical design solutions @reservebankau @BNM_official @MAS_sg @SAReserveBank https://t.co/DYn9zx37Xa pic.twitter.com/6XqRWuY8F3
— Bank for International Settlements (@BIS_org) March 22, 2022
The Dunbar project was announced in September 2021 by its partners. It was led by the BIS Innovation Hub’s Singapore unit.
The pilot results confirmed that financial institutions can use the digital currencies issued by participating banks for direct transactions with each other on a single platform.
The work was organised along three main strands: defining functional requirements and design, and parallel technical implementation of prototypes on two platforms — Corda and Partior.
Three key questions were identified within the Dunbar project:
- Which entities should be allowed to operate on the mCBDC platform?
- How can the cross-border payments flows be simplified while respecting regulatory differences across jurisdictions?
- What governance mechanisms are needed for countries to share their national payment infrastructures?
In the pilot, practical solutions to these problems were proposed, tested through the development of viable prototypes.
“A common platform is the most efficient model for connecting to payments, but it is also the most difficult to implement. The Dunbar project demonstrated that the key issues of trust and joint governance can be addressed through governance mechanisms strengthened by robust technology,” said Andrew McCormack, head of the BIS Innovation Hub in Singapore.
As reported, BIS, together with the central banks of Hong Kong, Thailand, China and the UAE, is implementing Inthanon-LionRock in cross-border payments using CBDC.
In July 2021, the institution successfully completed the pilot in this area with the participation of the Bank of France and Singapore.