What Project Dunbar tested: one shared platform for several central bank digital currencies, two prototypes, and two ways to give foreign banks access.
Four central banks, one shared platform, two prototypes
Two ways to give a foreign bank access
What Project Dunbar was
Project Dunbar was run by the BIS Innovation Hub, the technology arm of the Bank for International Settlements, which serves central banks. The BIS announced it on 2 September 2021 and published results on 22 March 2022. Its project page says the main work took nine weeks and lists the project as concluded.
The four participating central banks were the Reserve Bank of Australia, the Central Bank of Malaysia (Bank Negara Malaysia), the Monetary Authority of Singapore and the South African Reserve Bank. The BIS stresses, in its general description of Innovation Hub work, that projects are experimental. A prototype shows what is possible, not what any central bank plans to launch.
The idea: one platform instead of many bilateral links
Today a payment between two countries usually passes through a chain of banks, each holding accounts with the next. A multi-CBDC platform imagines a different shape: several central banks put their digital currencies on one shared platform, so banks in different countries can settle with each other directly in central bank money.
The BIS says Dunbar’s results support the G20 roadmap for cross-border payments, which aims at faster, cheaper and more transparent payments, and describe the work as a first step towards a shared platform. Notice the modest wording. The page says the platform could reduce costs and increase speed; it does not report measured savings.
Two prototypes, one design question
The team did not build one system. It built two prototypes of the same idea on different technologies: one on Corda, developed with R3, and one on Quorum, developed with Partior. A design workstream led by Accenture, with support from Temasek, used Accenture’s capability model for financial market infrastructures, and DBS, JPMorgan and Temasek supported the technical work.
Our reading: testing the same design on two technologies is a way of showing that the design, rather than one vendor’s product, is what matters. If a rule about control or access only works on one platform, it is a feature of that platform, not of the idea. South Africa’s own interbank pilot, Project Khokha, also used Quorum, though it was a separate domestic project.
Who stays in control
The most cited design principle is about sovereignty. According to the BIS, each central bank keeps autonomy over the issuance of its currency, its local rules and its data, and technical controls enforce this even against the platform operator. Settlement itself follows common rules set at the platform level, while know-your-customer and anti-money-laundering checks stay under each country’s own rules.
That split matters for trust. A central bank is unlikely to put its currency on a platform that someone else could override. The prototypes were meant to show that shared rails and national control can coexist.
Two ways in for foreign banks
The project looked at how banks outside a country could hold that country’s CBDC. In the hybrid model, a non-local bank holds it through a local sponsoring bank, which carries out the identity and money-laundering checks. In the direct model, there is no sponsor, but the BIS notes this would need regulatory changes and harmonisation between jurisdictions.
The hybrid route is easier to start with, because it fits existing rules. The direct route is simpler in operation but depends on laws that may take years to align. The diagram above sets the two side by side.
What Dunbar did not show
It did not publish speed or cost numbers, it did not run in production, and it did not commit any central bank to issuing a currency. It also did not settle the harder questions that later BIS work, such as Agorá and mBridge, continued to examine. If a headline tells you Dunbar “proved” something large, check the BIS page, which is careful about what it claims.
Read it as an early, well-documented step: a published design for how several central banks could share a platform without surrendering control of their currencies.
Sources
- Project Dunbar (project page). BIS Innovation Hub, Bank for International Settlements, 2021 to 2022.
- Project Dunbar: international settlements using multi-CBDCs. BIS Innovation Hub and participating central banks, March 2022.
- BIS Innovation Hub led Project Dunbar’s final report (media release). South African Reserve Bank, March 2022.
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