Cross-border payments using digital currencies may be closer to reality than previously reported, according to a report released Tuesday by the central banks of Australia, South Africa, Singapore, and Malaysia. The report stated that their prototype platform for settling state-backed virtual assets was “technically viable.”
“Project Dunbar” aims to eliminate financial intermediaries, save time and money when paying overseas, and make settlement as simple as domestic transactions.
The September-launched prototype is still stuck on issues of legislation and governance, as well as who should have direct access to the platform. Under the proposed guidelines, commercial banks would be able to pay each other in another country’s virtual currency. It’s the latest in a long line of initiatives spearheaded by the Bank for International Settlements, which has previously looked into deploying tokenized assets for securities trading in Switzerland and environmentally friendly green bonds in Hong Kong.
According to Andrew McCormack, head of the BIS Singapore Innovation Hub, the project is “building the framework for the establishment of future global and regional platforms.”
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