The Bank for International Settlements (BIS) Innovation Center has completed trials of a central bank digital currency (CBDC) pilot platform for international settlements with the central banks of Australia, Malaysia, Singapore and South Africa.

A multinational CBDC pilot called Project Dunbar is designed to facilitate direct cross-border transactions between financial institutions using multiple currencies linked between multiple central banks.

The second CBDC pilot was announced in September 2021 and the final report was released on Tuesday. The joint central bank digital currency pilot program has been successful and has demonstrated that financial institutions can use digital currencies issued by central banks to trade directly with each other on a common platform.

Before developing prototypes, the project took into account several aspects. Some of the key issues the project aims to address include addressing cross-border funds transfers in a regulatory manner and implementing a centralized cross-border payment infrastructure.

The project was successful in developing working prototypes and demonstrating workable solutions, and stated that the idea of ​​a multinational binary base currency was technically feasible. The prototypes demonstrated that the design approaches used to address the three main problems of access, jurisdictional and governance constraints were effective.

The project developers said the Dunbar project demonstrated how governance structures enhanced by powerful technological tools can address important issues related to trust and shared control. Andrew McCormack, head of the BIS Innovation Center in Singapore, said:

“The Dunbar project has shown that key issues around trust and shared control can be addressed through robust technology-based governance mechanisms, laying the groundwork for the development of future global and regional platforms.”
Related Topics: BIS joins French and Swiss central banks in cross-border CBDC project

Prior to the advent of the BIS Innovation Center’s multi-platform CBDC, countries such as Switzerland and France experimented with cross-border fund transfers as part of a joint digital euro project. Now the results of the CBDC pilot program may lead to the adoption of an international settlement of the Convention on Biological Diversity for the G20 countries.

With over 95 countries currently working on their own sovereign digital currency, using CBDC for international payments could become a reality, especially at a time when many governments are already looking at options for centralized payment gateways like SWIFT.

Source: CoinTelegraph