DESPITE the innovation, aspirations, exuberance, hype and scams about unregulated digital currencies, the world seems to be edging towards the introduction of official central bank digital currencies (CBDCs) for the settlement of international payments.
Almost unnoticed, the SA Reserve Bank (Sarb) as part of the Bank for International Settlements (BIS) Singapore Innovation Hub, which also includes the Reserve Bank of Australia, Bank Negara Malaysia, and Monetary Authority of Singapore, last month completed prototypes for a common platform enabling international settlements using multiple central bank digital currencies (mCBDCs).
The collaboration, code named “Project Dunbar”, shows that financial institutions could use CBDCs issued by participating central banks to transact directly with each other on a shared platform. This has the potential to reduce reliance on intermediaries, and the costs and time taken…