Central banks in Australia, Malaysia, Singapore and South Africa will join forces to test the use of central bank digital currencies (CBDCs) for international settlements, the banks said on Thursday.
Led by the Innovation Hub’s Singapore Centre, the project aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs, said a statement from the Bank for International Settlements Innovation Hub, the Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore and South African Reserve Bank.
According to them, these multi-CBDC platforms will allow financial institutions to transact directly with each other in the digital currencies issued by participating central banks, eliminating the need for intermediaries and cutting the time and cost of transactions, reported Xinhua.
They also said the project will work with multiple partners to develop technical prototypes on different distributed ledger technology platforms.
It will also explore different governance and operating designs that would enable central banks to share CBDC infrastructures, benefitting from the collaboration between public and private sector experts in different jurisdictions and areas of operation, they added.