The Bank for International Settlements (BIS) Innovation Hub has announced plans to test international settlements with a central bank digital currency (CBDC) in a cooperation with four central bank of Australia, Malaysia, Singapore and South Africa.
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The so-called Project Dunbar aims to create prototype of a shared platform for cross-border transactions using various types of CBDCs, the organization said in a press release.
"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 announcement says.
The announcement also says that the project will test multiple prototypes on different distributed ledger-based platforms. It is expected that the project will also test various governance models to regulate CBDC infrastructures. The BIS plans to publish results of the experiment in early 2022.
In June this year, the BIS highlighted that CBDCs will protect countries from digital currencies' monopoly of big tech companies. Benoît Cœuré, the Head of the BIS Innovation Hub, says that the digitization train already has left the station as 56 central banks are already exploring the creation of digital currencies. Cœuré also claims that without CBDC, digital money will increasingly be dominated by large tech companies as they leverage huge social media user bases.
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