The Bank of France (Bank of France), the Swiss National Bank, and the Bank for International Settlements successfully test the use of digital currency from the central bank wholesale in cross-border payments. This project was implemented using distributed ledger technology with the support of private companies.
France and Switzerland Explore the Direct Transfer of Euro, Swiss Franc Wholesale Digital Currencies
A trial by France’s monetary authorities and Switzerland’s Bank for International Settlements (BIS), revealed that CBDCs from central banks can be used for international settlements among financial institutions.
The banks said that Project Jura was a recent project that aimed to settle foreign currency transactions using euro and Swiss Franc wholesale CBDCs. It also involved issuing, transferring, and redeeming tokenized French-denominated commercial paper between French financial institutions and Swiss ones.
It involved direct transfers of wholesale CBDCs in euro and Swiss Franc between French and Swiss commercial banks on one distributed platform. The platform was operated by third parties and had real-value transactions. This trial was done in cooperation with Accenture and Credit Suisse as well UBS, Natixis (R3, SIX Digital Exchange), Natixis (Credit Suisse), UBS, UBS, UBS, Credit Suisse, Credit Suisse, Credit Suisse, Credit Suisse, Credit Suisse) and Natixis (R3, SIX Digital Exchange).
The partners believe that issuing wholesale CBDCs to provide regulated financial institutions (non-residents) with access to central bank funds raises policy concerns. They came up with a novel approach to address them, using subnetworks, dual-notary signature, and which was expected to increase central bank confidence in issuing wholesale CBDCs through third-party platforms. Benoît Cœuré, who heads the BIS Innovation Hub, commented:
Project Jura demonstrates that an internationally designed wholesale CBDC is a valuable settlement asset. This project also shows how the central banks and private sector can collaborate across national borders in order to promote innovation.
“Jura demonstrates how wholesale CBDCs can optimise cross-currency and cross-border settlements, which are a key facet of international transactions,” added Sylvie Goulard, deputy governor of Banque de France.
The wholesale CBDC experiment is part of a series of trials launched by Bank of France last year and a continuation of the testing carried out under SNB’s Project Helvetia. While it contributes to ongoing cross-border payment work at G20 the central banks made a comment while noting that they should not consider this a plan to issue wholesale CBDCs.
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