The Bank for International Settlements (BIS) Innovation Center, which includes 63 central banks that together make up 95% of global GDP, is creating a platform for international payments that will directly rival Ripple and its services.

Yesterday, the Bank for International Settlements announced the launch of Project Dunbar.

This comes right after the recent news that Ripple partners have made significant progress in creating an alternative to SWIFT and the inclusion of RippleNet as a competitor to SWIFT by the Arab Monetary Fund Group.

Is the “Dunbar” project competitive with Ripple at the institutional level?

In a press release, the Bank for International Settlements announced that the central banks of Australia, Malaysia, Singapore and South Africa are developing a common platform that could enable international settlements using digital currencies.

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In general, the objective of the project is to facilitate direct cross-border transactions between financial institutions in different currencies in a cheap and efficient manner.

Much like Ripple, Dunbar aims to replace the old, slow and costly banking model of international transactions that relied on financial institutions holding foreign currencies and often requiring single payments to go through multiple institutions before settling them.

In the Dunbar project, there will be no need to rely on intermediaries with foreign exchange reserves, thus reducing the cost and time required for cross-border transactions.

Project Dunbar, which focuses on international settlements using multinational core digital currencies, appears to be lining up squarely with institutional support against Ripple-allied players such as The Clearing House.

He told the BIS that they have successfully developed two prototypes for the Common International Settlement platform.

In response to the full report, Subindu Ohante, Chief Financial Technology Officer at the Monetary Authority of Singapore, commented:

Project Dunbar is a milestone in enhancing the efficiency of cross-border payments globally.

In the event of the success and adoption of the “Dunbar” project, this means direct competition with Ripple services, the latter of which has also made strides in this field through its partnerships with many financial institutions across different regions of the world.

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