Central banks of Switzerland and France in wholesale CBDC trial – Ledger Insights – –

Central banks of Switzerland and France in wholesale CBDC trial – Ledger Insights – –

Today, the Swiss National Bank announced its participation in a wholesale central bank digital currency (CBDC) trial with the Banque de France and the BIS Innovation Hub. The solution aims to use the digital Swiss franc and the digital euro to settle cross-border transactions of financial instruments such as stocks or bonds on a blockchain. Central banks don’t want the tests to be interpreted as a decision to launch a CBDC.

Other participants in the Jura project for cross-border settlements trial are Accenture and its consortium of Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS. These participants are also part of Accenture’s consortium for wholesale digital euro experiments at the Banque de France. The French central bank has created eight consortia in one of the largest central bank digital currency trials to date. Recently, it provided a CBDC to settle the public issuance of blockchain bonds by the European Investment Bank.

The use of distributed ledger technology enables instant settlement or delivery against payment (DvP) of a stock exchange transaction. This is an atomic transaction, so if one part of the transaction fails, like the transfer of the asset or the payment, both sides fail. A potential benefit of this type of transaction is that it reduces the need for existing central counterparties to manage credit risks when transactions fail.

“The Swiss National Bank is already exploring the settlement of tokenized assets with the wholesale CBDC as part of the Helvetia project. We look forward to extending this analysis to a cross-border context by participating in this exciting initiative, ”said Andréa M. Maechler, Member of the Executive Board of the Swiss National Bank.

Six months ago, the Swiss National Bank shared the results of the Helvetia project, which concluded that it was a success, but that more work is needed. Perhaps this was disappointing for the SIX Digital Exchange (SDX), which plans to launch its digital asset exchange soon. Instead, SDX plans to use its own SDX coin backed by central bank deposits.

Benoît Cœuré, head of the BIS Innovation Hub, also involved in the Helvetia project, observed that the Jura project complements other work of the BRI that targets a G20 objective to improve cross-border payments. The BIS is participating in a multi-CBDC trial in Asia with the central banks of Hong Kong, Thailand, China and the United Arab Emirates. Additionally, there is another test with the Monetary Authority of Singapore, the Dunbar Project, for a single distributed ledger system to be used for multi-CBDC cross-border payments by commercial banks.


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