BIS and Four Central Banks Complete Project Dunbar Multi-CBDC Prototypes

The Bank for International Settlements Innovation Hub and the central banks of Australia, Malaysia, Singapore and South Africa announced on March 22, 2022 that Project Dunbar had completed two experimental prototypes for settling international transactions with multiple central bank digital currencies.

The institutions reported that the prototypes demonstrated the technical viability of allowing financial institutions to transact directly in digital currencies issued by participating central banks on a common platform. That was a meaningful infrastructure result: Project Dunbar moved the multi-CBDC concept beyond policy papers and into working software, although it did not create a live payment network or commit any country to issuing a CBDC.

What Project Dunbar built

Project Dunbar examined wholesale CBDCs, meaning digital central-bank money intended for transactions among banks and other authorized financial institutions—not a retail currency offered to the public.

The project organized its work into one design stream and two technical streams. According to its 63-page report, the technical teams produced prototypes using Corda and Quorum-based technology, with R3 leading the Corda work and Partior leading the other prototype with support from DBS, JPMorgan and Temasek. The design work was led by Accenture with support from Temasek. Three project sprints ran over nine weeks.

Each participating central bank would issue its own currency on the proposed shared platform. Authorized commercial banks could then hold and transact in eligible foreign CBDCs directly, potentially reducing the number of correspondent institutions and separate ledgers involved in a cross-border payment. The design also contemplated payment-versus-payment settlement, in which both sides of a currency exchange complete together, reducing the risk that one party delivers while the other does not.

These were prototype capabilities, not measurements from production finance. The report did not establish operating costs, commercial transaction volumes, production-scale throughput or savings achieved by actual customers.

Why the result mattered

International bank payments commonly traverse correspondent relationships, multiple systems and different message formats. Compliance with foreign-exchange controls and anti-money-laundering requirements can also be repeated across jurisdictions. Project Dunbar tested whether a shared settlement layer could simplify that structure without converting central-bank money into a permissionless cryptocurrency.

The distinction mattered in the digital-asset debate of March 2022. Public cryptocurrencies generally allowed open network participation and market-determined prices. Project Dunbar instead explored permissioned infrastructure governed by central banks, with access restricted to approved institutions and each participating authority retaining control over rules applying to its jurisdiction and currency.

The project therefore represented institutional adoption of some distributed-ledger and programmable-settlement concepts, not adoption of bitcoin, ether or any privately issued token. No market-price conclusion can be drawn from the prototypes, and the March 22 records did not attribute movements in publicly traded crypto assets to the announcement.

The unresolved institutional questions

The project identified three central problems: deciding which institutions could hold foreign CBDCs, reconciling different national rules as payments crossed borders, and creating governance arrangements acceptable to countries sharing critical financial infrastructure.

Its proposed approaches included direct access for some nonresident banks, common platform rules, jurisdiction-specific controls and technical mechanisms for shared governance. But the report was candid that the experiment generated additional questions across policy, business and technology. Michele Bullock, then the Reserve Bank of Australia’s assistant governor for the financial system, said more work remained on feasibility and design.

That limitation defines the March 22, 2022 record. Project Dunbar established that two prototype implementations could execute the project’s intended multi-CBDC model. It did not establish legal authority for issuance, universal interoperability, production security, economic viability or agreement among governments to deploy the system. Those required separate policy decisions, legal frameworks and further testing beyond the event date.