Central banks of France, Switzerland and the BIS complete cross-border CBDC process – Bitcoin News
The Bank of France, the Swiss National Bank (SNB) and the Bank for International Settlements have successfully tested the use of the central bank’s digital wholesale currency in cross-border payment transactions. The project used distributed ledger technology and was implemented with the help of private companies.
France and Switzerland are exploring direct transfer of digital wholesale currencies in euros and Swiss francs
An experiment carried out by the monetary authorities of France, Switzerland and the Bank for International Settlements (BIS) has shown that the digital currencies of the central banks (CBDCs) can be used effectively for the international settlement of payments between financial institutions, communicated the participants of the process.
The recently completed Jura project focused on processing foreign exchange transactions in euro and Swiss franc CBDCs, as well as issuing, transferring and redeeming a tokenized, euro-denominated French commercial paper between French and Swiss financial institutions, the banks said.
The test involved the direct transfer of wholesale CBDCs in euros and Swiss francs between commercial banks in France and Switzerland on a single distributed ledger platform operated by a third party and with real value transactions. It was carried out in cooperation with the private companies Accenture, Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS.
According to the partners, issuing wholesale CBDCs by providing regulated non-resident financial institutions direct access to central bank money raises certain policy issues. To address these, they took a new approach by using subnetworks and two-notary signature, which is intended to give central banks the confidence to issue CBDCs for large customers on third-party platforms. Benoît Cœuré, who heads the BIS Innovation center, commented:
Project Jura affirms that a well-designed wholesale CBDC can play a critical role as a secure and neutral settlement asset for international financial transactions. It also shows how central banks and the private sector can work together across borders to foster innovation.
“Jura shows how wholesale CBDCs can optimize the cross-currency and cross-border processing that is an important facet of international transactions,” added Sylvie Goulard, Deputy Governor of Banque de France.
The wholesale CBDC experiment is part of a series of experiments launched by the Bank of France last year and a continuation of the tests carried out as part of the SNB Helvetia project. It also contributes to the ongoing work on cross-border payments G20, noted the central banks, but also noted that this should not be viewed as a plan on their part to issue CBDCs to large customers.
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