Why Project Dunbar Is One of the Industry’s Most Significant Partnerships

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In a bid to test the use of central bank digital currencies (CBDCs) in regards to international settlements, a considerable and significant partnership has been formed between The Bank for International Settlements Innovation Hub, The Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore, and South African Reserve Bank, in what has come to be identified as ‘Project Dunbar’.

Led by the Innovation Hub’s Singapore Centre, Project Dunbar aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs. These multi-CBDC 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.

Andrew McCormack, Centre Head of the BIS Innovation Hub Singapore CentreAndrew McCormack, Centre Head of the BIS Innovation Hub Singapore Centre
Andrew McCormack, Centre Head of the BIS Innovation Hub Singapore Centre

“Project Dunbar brings together central banks with years of experience and unique perspectives in CBDC projects and ecosystem partners at advanced stages of technical development on digital currencies,” comments Andrew McCormack, Centre Head of the BIS Innovation Hub Singapore Centre. “With this group of capable and passionate partners, we are confident that our work on multi-CBDCs for international settlements will break new ground in this next stage of CBDC experimentation and lay the foundation for global payments connectivity.”

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.

“We are pleased to collaborate with the BIS Innovation Hub and the central bank partners on this important initiative to explore how a shared platform for multiple CBDCs could be used to improve the speed, cost and transparency of wholesale cross-border transactions. Enhancing cross-border payments has become a priority for the international regulatory community and something that we are also very focused on in our domestic policy work,” said Michele Bullock, Assistant Governor (Financial System), Reserve Bank of Australia.

Fraziali Ismail, Assistant Governor, Bank Negara MalaysiaFraziali Ismail, Assistant Governor, Bank Negara Malaysia
Fraziali Ismail, Assistant Governor, Bank Negara Malaysia

Bank Negara Malaysia’s Assistant Governor Fraziali Ismail added, “The multi-CBDC shared platform explored under Project Dunbar has the potential to leapfrog the legacy payment arrangements and serve as a foundation for a more efficient international settlement platform. We hope the project will spur greater public-private collaboration to enable fast and frictionless cross-border payments, combining both the benefits of distributed ledger technology and the efficiency of a common platform.”

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.

“Project Dunbar’s work on using multi-CBDC platforms to facilitate seamless multi-currency fund transfers is a significant contribution to the global vision to make payments cheaper and faster. The findings on how a common platform can be governed effectively and managed efficiently will shape the blueprint of the next generation payment systems,” said Sopnendu Mohanty, Chief Fintech Officer, Monetary Authority of Singapore.

Rashad Cassim, Deputy Governor, South African Reserve BankRashad Cassim, Deputy Governor, South African Reserve Bank
Rashad Cassim, Deputy Governor, South African Reserve Bank

“After years of mostly domestic research and exploration, we are very pleased to see that these common insights about the need to explore cross-border CBDC payments and interoperability are coming together internationally. We are particularly excited to be part of Project Dunbar given the SARB’s role in operating the regional wholesale settlement system in the Southern African Development Community,” added Deputy Governor Rashad Cassim, South African Reserve Bank.

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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