Moody’s Investors Service (Moody’s) said the Bank of International Settlements (BIS), together with the central banks of Singapore, Australia, Malaysia and South Africa, had on Sept 3 started testing CBDCs for cross-border settlements. This was dubbed as “Project Dunbar”.

Project Dunbar will develop prototypes for shared platforms that will enable international settlements with digital currencies issued by multiple central banks.

Moody’s said in a research note today that this will allow faster, cheaper and more secure cross-border payments and settlements between financial institutions.

“This is the first time that the BIS and various central banks are testing multiple CBDCs in a single platform for cross-border settlements.

“This is an important step if CBDCs are to be adopted beyond domestic transactions,” said Moody’s.

It said that earlier this year, the Singaporean and French central banks had successfully tested dual-CBDC cross-border transactions.

“The revenue that banks generate from cross-border transactions is significant.

“Globally, banks generated about US$230 billion in revenue from cross-border transactions in 2019, based on data from McKinsey.

“Asia Pacific banks account for about US$100 billion of this amount, the largest share globally, with the most revenue coming from commercial transactions such as bank-to-bank,” it said.