Central banks of France, Switzerland and BIS complete cross-border CBDC process – Finance

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 wholesale digital 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 wholesale digital currencies in euros and Swiss francs

An experiment conducted by the monetary authorities of France, Switzerland and the Bank of International Settlements (BIS) has found that central bank digital currencies ( CBDCs ) can be effectively used for international settlements between financial institutions, participants in the process said.

Project Law, which recently concluded, focused on the settlement of foreign exchange transactions in euro and Swiss franc CBDCs, as well as the issuance, transfer and redemption of a tokenized euro-denominated French commercial paper between French and Swiss financial institutions, the banks said.

The trial 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 collaboration with 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 funds raises certain policy questions. To address these, they took a new approach by using subnetworks and dual notary signing, which is intended to give central banks the confidence to issue wholesale CBDCs on third-party platforms. Benoît Cœuré, who heads the BIS Innovation Center, commented:

Project Jura confirms that a well-designed wholesale CBDC can play a crucial role as a safe and neutral settlement asset for international financial transactions. It also shows how central banks and the private sector can work together across borders to promote innovation.

“Jura demonstrates how wholesale CBDCs can optimize cross-currency and cross-border settlements, which are an important facet of international transactions,” added Sylvie Goulard, Deputy Governor of the Banque de France.

The wholesale CBDC experiment is part of a series of trials launched by the Bank of France last year and a continuation of the tests carried out under the SNB Project Helvetia. It also contributes to the ongoing work on cross-border payments G20, the central banks noted, but also noted that this should not be viewed as a plan on their part to issue wholesale CBDCs.

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