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Australia, Malaysia, Singapore, South Africa To Jointly Pilot CBDCs

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The Central Banks of Australia, Malaysia, Singapore and South Africa, along with the Bank for International Settlements Innovation Hub, are set to jointly pilot central bank digital currencies (CBDCs) for international settlements.The pilot aims to use multiple CBDCs to allow direct transactions between institutions to improve the speed, cost and transparency of wholesale cross-border transactions.

The Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore, and South African Reserve Bank are looking to join forces to support the G20 roadmap for improving cross-border payments.

Dubbed Project Dunbar, the pilot will help in the development of prototypes for shared platforms that will enable international cross-border settlements with CDBCs issued by multiple central banks. The project is led by the Innovation Hub's 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," said Andrew McCormack, Centre Head of the BIS Innovation Hub Singapore Centre.

The joint initiative 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.

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.

The results of the project are expected to be published in early 2022 to form the basis for the development of future platforms for global and regional settlements. The technical prototypes of the shared platforms, developed in collaboration with different technology partners, will also be demonstrated at the Singapore FinTech Festival in November 2021.

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