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The Bank for International Settlements (BIS) Innovation Hub, the Reserve Bank of Australia, Bank NegaraMalaysia, the Monetary Authority of Singapore, and the South African Reserve Bank today announced thecompletion of prototypes for a common platform enabling international settlements using multiple centralbank digital currencies (mCBDCs).

Led by the Innovation Hub's Singapore Centre, Project Dunbar proved that financial institutions coulduse CBDCs issued by participating central banks to transact directly with each other on a sharedplatform. This has the potential to reduce reliance on intermediaries and, correspondingly, the costs andtime taken to process cross-border transactions.

The project was organised along three workstreams: one focusing on high-level functional requirements anddesign, and two concurrent technical streams that developed prototypes on different technologicalplatforms (Corda and Partior).

The project identified three critical questions: which entities should be allowed to hold and transactwith CBDCs issued on the platform? How could the flow of cross-border payments be simplified whilerespecting regulatory differences across jurisdictions? What governance arrangements could give countriessufficient comfort to share critical national infrastructure such as a payments system?

The project proposed practical solutions for addressing these issues, which were validated through thedevelopment of prototypes that demonstrated the technical viability of shared multi-CBDC platforms forinternational settlements.

A common platform is the most efficient model for payments connectivity but is also the mostchallenging to achieve. Project Dunbar demonstrated that key concerns of trust and shared control can beaddressed through governance mechanisms enforced by robust technological means, laying the foundation forthe development of future global and regional platforms, said Andrew McCormack, Head of the BISInnovation Hub Centre in Singapore.

The project's findings also affirmed that any such arrangement should be subject to the governancedeemed appropriate by central bank participants, including allowing them to retain control of theapplication of rules on a jurisdictional and currency level.

The details and conclusions of the project were published today in a report that supports the efforts ofthe G20roadmap for enhancing cross-border payments, particularly in exploring an internationaldimension of CBDC design.

Project Dunbar has provided valuable insights into the opportunities and challenges associated withdeveloping a shared platform for multiple CBDCs to enhance cross-border payments. Allowing entities todirectly hold and transact in CBDCs from different jurisdictions could reduce the need for intermediariesin cross-border payments, but it would need to be done in a way that preserves the security andresilience of these payments. While there is clearly more work to be done in thinking about thefeasibility and design of multi-CBDC platforms, the findings from Project Dunbar provide a good platformfor future work in this area, said Michele Bullock, Assistant Governor (Financial System), ReserveBank of Australia.

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BIS Innovation Hub and Central Banks of Australia, Malaysia, Singapore and South Africa Develop Experimental Multi-CBDC Platform for International...