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2/2 © Reuters. FILE PHOTO: A view of the Monetary Authority of Singapore’s headquarters in Singapore June 28, 2017. REUTERS/Darren Whiteside 2/2 By Alun John

HONG KONG (Reuters) -Central banks in Australia, Singapore, Malaysia and South Africa will conduct a cross border payments trial using different central bank digital currencies (CBDC) to assess if this allows transactions to be settled more cheaply and easily, the banks said on Thursday.

Many governments and central banks around the world are exploring the use of CBDCs, which are digital forms of existing currencies. Some, like China, are trialing retail-focused CBDCs designed to replicate cash in circulation, while others are considering using so-called wholesale CBDCs to improve the internal workings of their financial systems.

Most projects are still in the early stages and are domestically focused, but developing global rules and frameworks for how CBDCs can be used internationally is complicated technically, and potentially politically.

This latest project aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs, said the statement from the Reserve Bank of Australia, Bank Negara Malaysia, the Monetary Authority of Singapore, the South African Reserve Bank, and the Bank of International Settlement’s Innovation Hub, which is leading the scheme.

These platforms would enable financial institutions to transact directly with each other in CBDCs, which could eliminate the need for intermediaries and reduce the time and cost of transactions.

The initiative, which will also explore different technical, governance and operating designs, should publish its results in early 2022, the statement said.

“The multi-CBDC shared platform … has the potential to leapfrog the legacy payment arrangements and serve as a foundation for a more efficient international settlement platform,” Assistant Governor Fraziali Ismail, Bank Negara Malaysia said in the statement.

A separate BIS-led project exploring using CBDCs for cross border payments is also underway involving central banks from China, Hong Kong, Thailand and the UAE.