MNI BRIEF: RBA Sees Promise In BIS CB Digital Currency Project

A project involving the Bank of International Settlements and four central banks shows potential for central bank digital currencies (CBDCs) to reduce intermediaries in cross border payments, according to a spokesperson for the Reserve Bank of Australia, one of the participating banks.

Michelle Bullock, an RBA assistant governor, said the project – which also included Bank Negara Malaysia, the Monetary Authority of Singapore and the South African Reserve Bank – had provided a “good platform” in the area of CBDCs and has proved that the central banks could transact directly with each other on a shared platform.

“Allowing entities to directly hold and transact in CBDCs from different jurisdictions could reduce the need for intermediaries in cross border payments, but it would need to be done in a way that preserves the security and resilience of these payments,” Bullock said.

Called “Project Dunbar”, and led by the BIS Innovation Hub in Singapore, the effort focused on design and developed prototypes on different technological platforms. In Asia, the People's Bank of China has moved to adopt a digital currency, see: MNI INTERVIEW1: China Payment Platforms To Drive Global E-CNY.