The Bank of International Settlements (BIS) Innovation Hub is working with the central banks of Australia, Malaysia, Singapore and South Africa to test the efficacy of wholesale central bank digital currencies (CBDC) in cross-border settlements.

The bank said Thursday the goal of “Project Dunbar” is to develop prototype platforms that can support international settlements with digital currencies issued by multiple central banks. According to the statement, the project will focus on developing these prototypes on different distributed ledger technology platforms and experiment with various governance and operating designs that could help central banks to share CBDC infrastructures.

“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,” the announcement said.

Despite taking a cautionary stance on CBDCs back in 2019, BIS changed gears and announced it was planning its own digital currency trials the very next year. In its annual economic report for 2021, BIS highlighted that CBDCs could improve cross-border payments. The report also said that while multi-CBDC solutions could ease sharing of required information (like digital IDs) across borders, it will require international cooperation.

The bank announced its Innovation Hub initiative to build testing platforms for multiple digital currencies back in January. Three centers of the Innovation Hub in Singapore, Hong Kong and Switzerland are all working on multi-CBDC settlements, while Project Dunbar is led by the Singapore Centre.

According to the statement by BIS, experimenting with CBDC design for international settlements aligns with the G20 roadmap for “enhancing cross-border payments.” Published in October 2020, the roadmap expressed the need for “faster, cheaper, more transparent and more inclusive cross-border payment services, including remittances.”

The results of Project Dunbar are expected to be published in early 2022 while technical prototypes of the shared platforms are to be demonstrated at the Singapore FinTech Festival in November of this year.