Reports from current crypto market news show that it might be celebratory times for the BIS. The Bank of International Settlement or BIS Innovation Hub has been successful in completing a particular experiment related to the creation of a particular Central Bank Digital Currency or more commonly known as the CBDC platform pilot.
This particular experimental CBDC platform has managed to take the world by a storm since the amazing design approaches that have been taken to properly address the important issues have actually worked in this case.
This announcement of BIS has surprised the entire world since the CBDS platform has managed to tackle the important issues of jurisdictional boundaries, governance, and access in a very efficient and effective manner.
This particular experimental project for the creation of a CBDC platform pilot will be used for international settlement with different central banks of Malaysia, South Africa, Singapore, as well as Australia. This is definitely a very huge step for the Innovation Hub as it has managed to tackle all the issues related to the usage of CBDCs in one particular platform in a simple and effective manner.
The name of the Project was Project Dunbar and it was a multi-national project that was mostly in the experimental phase. The development of the project took place in order to properly facilitate the direct transactions that took place across borders between the different financial institutions using all the various currencies that have a connection across the central banks in these regions.
This goal of the BIS would actually ensure that there would be a new way of making international settlements and transactions with all the various central bank institutions. After the project was completed, the announcement was made the BIS about the creation of this particular platform for proper CBDC transactions that would also work internationally.
Final Report Shared About BIS’s CBDC Platform Allows Banks to Transact Directly
The joint CBDC pilot was announced in September 2021, and a final report regarding the same was released on Tuesday. The experimental joint CBDC program turned out to be a success and proved financial institutions can use CBDCs issued by central banks to transact directly with each other on a shared platform
The project took several aspects into consideration before developing prototypes. Some of the key issues that the project is trying to solve include resolving cross-border remittance issues in accordance with the regulatory requirements and bringing in key payment infrastructure across national borders.
The project was successful in developing functioning prototypes and demonstrating practical solutions, establishing that the notion of multi-CBDCs was technically realistic. The prototypes proved that the design approaches used to address the three major issues of access, jurisdictional boundaries and governance were effective.
The developers of the project claimed that Project Dunbar illustrated how governance structures enforced by robust technology means can meet important concerns of trust and shared control. Andrew McCormack, head of the BIS Innovation Hub Centre in Singapore, said:
“Project Dunbar demonstrated that key concerns of trust and shared control can be addressed through governance mechanisms enforced by robust technological means, laying the foundation for the development of future global and regional platforms.”
Prior to BIS innovation hub’s multi-CBDC platform, the likes of Switzerland and France experimented with cross-border remittance in a joint venture for a digital euro. Now, the findings of the experimental CBDC program could aid in the adoption of CBDC international settlement for G-20 nations.
With over 95 nations currently working toward their sovereign digital currency, CBDC use for international settlements could become a reality, especially at a time when many governments are already looking to build alternatives for centralized payment gateway like SWIFT.
Also Read: Bank of Israel: CBDC will have Minimal Effect on the Banking System
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