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Cross-border payments using digital currencies might be coming closer to reality as central banks in Australia, South Africa, Singapore and Malaysia said in a report Tuesday their prototype platform for settling state-backed virtual assets was "technically viable."
- “Project Dunbar” is seeking to cut out financial intermediaries and reduce time and cost when paying overseas – making settlement as easy as domestic transactions.
- The prototype, kicked off in September, is still stuck on questions of regulation and governance as well as who should be given direct access to the platform.
- The plans would mean commercial banks can pay each other directly in another country’s virtual currency.
- It’s the latest in a series of projects convened by the Bank for International Settlements, which has also explored using tokenized assets for securities trading in Switzerland, and environmentally friendly green bonds in Hong Kong.
- Head of the BIS Singapore Innovation Hub Andrew McCormack said in a media statement the project was “laying the foundation for the development of future global and regional platforms.”
Read more: Australia, Malaysia, Singapore, South Africa to Trial CBDCs for Cross-Border Payments
