Four Countries to Test Cross-border Payments with Digital Currencies

The digital currencies and cross-country payment system are starting to be tested in four countries.

The Bank for International Payments (BIS) announced yesterday that Australia, Malaysia, Singapore and South Africa have agreed to test cross-border payments using central bank digital currencies (CBDC) in late 2021 and early 2022. Let’s also note that this project is called Project Dunbar.

The BIS said in a statement that banks in the four countries will collaborate with the BIS Innovation Center on “prototypes for joint platforms that will enable international payments with digital currencies issued by multiple central banks.”

Publisher The Register noted that none of the four countries participating in the Dunbar Project have a working CBDC. BIS said the following about this issue:

“These multiple CBDC platforms will allow financial institutions to transact directly with each other in digital currencies issued by participating central banks. The need for an intermediary is eliminated, reducing downtime as well as processing times and costs.”

CBDCs also continue to become more and more popular among different countries. For example, over $5.3 billion has been reportedly traded in China’s digital yuan, and the US System of Central Banks also plans to publish a report on a digital USD.

Digital currencies have the backing of the World Bank and International Monetary Fund, which published a report in their favor at the G20 under the BIS. This is why there is growing consensus that CBDCs are the payment method of the future.

BIS says it will showcase a technical prototype of Project Dunbar’s collaborative platforms at the Singapore FinTech Festival in November 2021 and plans to share details of the project in early 2022.