Wholesale CBDC project hailed a ‘success’ by Swiss and French central banks
A cross-border wholesale central bank digital currency (CBDC) experiment has been called a “great success” by the Banque de France (BdF), Swiss National Bank (SNB) and Bank for International Settlements’ (BIS) Innovation Hub.
The recently-completed experiment, named Project Jura, was a public-private collaboration led by the central banks, with a consortium led by Accenture and including Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS.
It was launched to discover whether CBDCs can be used effectively for international settlements between financial institutions, by exploring the settlement of foreign exchange (FX) transactions in euro and Swiss franc wholesale CBDC, as well as issuing, transferring and redeeming a tokenised euro-denominated French commercial paper between French and Swiss financial institutions.
Project Jura explored the direct transfer of euro and Swiss franc wholesale CBDCs between French and Swiss commercial banks on a single distributed ledger technology (DLT) platform operated by a third party.
In addition, tokenised assets and foreign exchange transactions were settled “safely and efficiently”, according to the report, using payment-versus-payment and delivery-versus-payment mechanisms.
Project Jura is one of a series of wholesale CBDC experiments initiated by the BdF in 2020 and is part of the ongoing experimentation conducted in parallel by the SNB and the BIS Innovation Hub under Project Helvetia.
Sylvie Goulard, deputy governor of the Banque de France, said: “With the great success of Jura, the wholesale CBDC experiment programme launched by the Banque de France in 2020 is now completed.
“Jura demonstrates how wholesale CBDC can optimise cross-currency and cross-border settlements, which are a key facet of international transactions.”
“Project Jura confirms that a well-designed wholesale CBDC can play a critical role as a safe and neutral settlement asset for international financial transactions,” added Benoît Cœuré, head of the BIS Innovation Hub.
“It also demonstrates how central banks and the private sector can work together across borders to foster innovation.”
The partners said that Project Jura was “novel in two ways”, given that it tests a new approach to promote cross-border settlements by extending the safety of central bank money to cross-border settlements between resident and non-resident financial institutions using multiple wholesale CBDCs.
The partners also stated that it demonstrates a “new approach” that may give central banks “comfort” to issue wholesale CBDC on a third-party platform with separate sub-networks and to allow regulated non-resident financial institutions access to wholesale CBDC (wCBDC).
Jos Dijsselhof, CEO of SIX, said: “Project Jura shows that wCBDC can offer a secure, fast and efficient way to use central bank money in settling international FX and securities transactions on a single production-grade platform – our own SIX Digital Exchange. We are excited to be part of this pioneering project.”
In September, the Bank of England and HM Treasury announced the members of the central bank digital currency (CBDC) Engagement and Technology Forums, which were unveiled in April this year, alongside the CBDC Taskforce, to coordinate the exploration of a potential UK CBDC.