Led by the Innovation Hub's Singapore Centre, Project Dunbar demonstrated that financial institutions could use CBDCs issued by participating central banks to transact directly with each other on a shared platform. This has the potential to "reduce reliance on intermediaries and, correspondingly, the costs and time taken to process cross-border transactions".

Project Dunbar, which will be led by the Innovation Hub’s Singapore Centre, aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs. The 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 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.  

Project Dunbar will explore the international dimension of CBDC design and support the efforts of the G20 roadmap for enhancing cross-border payments. Its results, expected to be published in early 2022, will inform the development of future platforms for global and regional settlements. 

In April, the Crypto Assets Regulatory Working Group (CAR WG), which resorts under the Intergovernmental Fintech Working Group (IFWG) and whose members include the National Treasury, South African Reserve Bank and Prudential Authority, FSCA, Financial Intelligence Centre, National Credit Regulator and South African Revenue Services, published a position paper that made various recommendations in respect of the regulation of cryptoassets.

The draft Declaration is meant to give effect to some of the recommendations in the position paper by declaring that cryptoassets are financial products under the FAIS Act.

"The Declaration would have the effect that any person furnishing advice or rendering intermediary services in relation to crypto assets must be authorised under the FAIS Act as a financial services provider, and must comply with the requirements of the FAIS Act. This will include crypto asset exchanges and platforms, as well as brokers and advisors," the FSCA said.

The FSCA said that the draft Declaration should improve disclosures to customers that show the risks involved in investing in cryptoassets better and it should also ensure that a more robust advice process is adopted when intermediaries advise customers to buy cryptoassets.

In addition, the licensing of intermediaries is also needed to improve the quality of data for policymakers and regulators about the crypto space and to determine whether further regulation is required.

"The draft Declaration in no way impacts the status of crypto assets in the context of other laws such as exchange control regulations, requirements under the Pension Funds Act and Collective Investment Schemes Act and so forth, nor does it attempt to regulate, legitimise or give credence to crypto assets. The draft Declaration is merely intended to be an interim step in mitigating certain immediate risks in the crypto assets environment pending the outcome of broader developments currently taking place through the CAR WG which will inform future policy interventions to be implemented across a variety of regulators and laws," the FSCA said.