The Bank of France, the Swiss National Bank and the Bank for International Settlements are collaborating to test two CBDC digital currencies in cross-border settlements.
In a release published this Thursday, the Bank of France reported that it is collaborating with the Swiss National Bank and the Bank for International Settlements to develop the Jura Project. The idea is to experiment in cross-border settlements with two wholesale CBDC digital currencies and a digital financial instrument designed by the French bank. According to the entity, a private sector consortium led by Accenture, which includes companies such as Credit Suisse, Natixis, R3, SIX Digital Exchange y UBS.
The test that the banks will carry out will allow the financial instrument developed by the Bank of France to be exchanged for the wholesale CBDC in euros, using the delivery versus payment (DvP) settlement mechanism. In addition, banks will also exchange the wholesale CBDC in euros for a wholesale CBDC in Swiss francs, using the payment versus payment (PvP) settlement mechanism. The Bank of France clarifies that the banks that will settle transactions between wholesale CBDCs will be domiciled in France and Switzerland, respectively.
In this way, the objective of those participating in this pilot is to experiment with new technologies for the digitalization of payments and CBDCs in the bank-to-bank wholesale loan and settlement market, without involving public transactions.
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CBDC and cross-border settlements
sylvie goulard, deputy governor of the Bank of France (Banque de France), declared that the technological innovation driven by cryptocurrencies, and technology blockchain in payment systems is pushing banking entities to adapt to new developments and advance digitalization.
For Goulard, the Eurosystem is making a strong commitment to new financial technologies in order to optimize the delivery and quality of its products and services, while remaining at the forefront of new innovations and developments.
The Bank of France is recognizing the potential of blockchain technology and CBDCs to provide a high level of security and efficiency within financial transactions. Since mid-2020, this entity has been publishing its progress in building a digital currency for the euro. Now, with the new implementations being prepared by banks in France and Switzerland, not only will a CBDC be tested in a limited environment, but cross-border settlements are incorporated to connect with different banks in the world, allowing for broader use of the potential of blockchain.
The Swiss National Bank, on the other hand, has also been experimenting with new technologies for the development of the project Helvetia, with which it is investigating the liquidation of tokenized assets through a wholesale CBDC.
Blockchain and DLT, technologies for change
Blockchain and DLT (Distributed Ledger Technology) They are technologies that are transforming the traditional financial system, so it is important for banking entities to begin to delve into these developments and implement pilot tests that allow them to evaluate the benefits and implications of the use of digital currencies.
I eat well said el Deutsche Bank By the end of 2020, CBDCs may become “the money of the future” and a potential threat to those banks that decide to stay with their current services.
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