Project Dunbar is the latest experiment from Bank for International Settlements (BIS), in which Australia, Malaysia, Singapore and South Africa, at the turn of 2021 and 2022, will test cross-border payments with the central bank’s virtual currency (CBDC).
Project Dunbar will show if cross-border virtual currency payments make sense
According to the announcement, banks in these four countries will cooperate with the BIS Innovation Hub on “prototypes of common platforms that will enable international settlements using digital currencies issued by many central banks“. As none of them have CBDC (Central Bank Digital Currencies) yet, the final results of Project Dunbar will be critical to their future with cryptocurrencies.
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The interest of these countries in virtual currencies managed by the central bank does not come out of nowhere. They will enable financial institutions to transact directly with each other in digital currencies issued by participating central banks, which “will eliminate the need for intermediaries, save time and costs”.
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The World Bank’s support for CBDC makes it clear that these virtual currencies may become the payment method of the future. That future, in turn, could come quickly, as the first technical prototype of Project Dunbar’s shared currency platforms is to be unveiled at Singapore FinTech Festival in November 2021, and its fruits in early 2022.
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