This is the first multi-CBDC settlement project and the participating countries

multi cbdc

As the US debates the CBDCs and their effects, the rest of the world is getting closer and closer to releasing their own CBDCs.

The Bank of International Settlements (BIS) recently announced their multi-CBDC pilot program Project Dunbar. This program, led by the BIS Innovation Hub, will be the first of its kind to handle international payments in multiple currencies more securely and faster. The announcement states:

“Project Dunbar explores how a common platform for multiple central bank digital currencies (multi-CBDCs) could enable cheaper, faster and more secure cross-border payments.”

The Reserve Bank of Australia, Bank Negara Malaysia, the Monetary Authority of Singapore and the South African Reserve Bank have also announced that they will participate in Project Dunbar to test the technical feasibility of multi-CBDCs.

Expected Benefits

Participating authorities expect to achieve the results below.

Less dependence on intermediaries. With the application of CBDCs, correspondent banks (banks that hold accounts in foreign currency) are not needed for settlements. This also eliminates the AML/CFT compliance steps of correspondent banks.

Simplification of the settlement process. CBDCs do not require banks to hold foreign currency accounts. Instead, CBDCs are transferred directly from the sender to the receiving bank. All transfers are temporarily registered in one ledger and are visible to all participants full-time.

Efficiency gains with common platform processes by eliminating the manual mediation processes with multiple AML/CFT requirements. A digital system will pre-set the sanctions and requirements of each country and automatically check the compliance of the transactions.

Process automation with smart contracts. An efficient CBDC platform also automatically applies business rules and conditions such as adequate liquidity, technical validations and meeting business requirements through smart contracts

Main Challenges

In the first step, Project Dunbar envisions three major challenges that will have a later impact on the multi-CBDC settlement platform.


The access challenge mainly concerns non-resident banks that do not have a local presence and are not authorized to provide domestic financial services. Will these banks be trusted to access and make payments with CBDCs?

To combat this problem, Project Dunbar includes two access frameworks as “direct” and “hybrid”.

Potential access models (via

The direct model will trust non-resident banks and allow them to hold CBDCs and transact directly. The hybrid model, on the other hand, requires non-resident banks to obtain a sponsorship from a commercial bank to monitor their KYC, AML and CFT processes. If everything is in order, the non-resident banks will be able to access the multi-CBDC platform through their sponsor banks.

Legal Limits

Simplifying cross-border payments while respecting regulatory differences between jurisdictions is another major challenge for Project Dunbar. To resolve this complication, the project took a design approach that distinguishes between cross-border settlements and other “non-settlement” processes.

Non-settlement processes such as KYC requirements will be differentiated and handled off-platform, while regulations related to international transfer arrangements such as sanctions will be executed through smart contracts.


Finally, while the shared platform is intended to apply universality, a certain level of security and privacy must be maintained. Therefore, the project designed a fair governance system in which diverse stakeholders are properly represented and decisions are made fairly. In addition, central banks will also be given autonomy within the boundaries and parameters of a universal framework at the platform level.

Despite the challenges, participants hope that Project Dunbar will be a worthwhile experience, even if it fails. Chief FinTech Officer of Singapore Monetary Authority Sopnendu Mohanty expressed their excitement, saying:

“Project Dunbar marks an important milestone in improving the efficiency of cross-border payments worldwide. The strong collaboration between participating central banks, commercial banks and technology solution providers has laid the foundation for developing future-proof payment rails. We look forward to participating in the next phases of this bold endeavour.”

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