The Bank of France and the Swiss National Bank have joined hands to launch the trial of cross-border transactions using central bank digital currencies (CBDC).
Announced on Thursday, the Bank of International Settlements (BIS) Innovation Hub is a partner of the two central banks in the trial, which will be the first of such kind in Europe. Additionally, a private consortium of companies, including Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS, led by IT giant Accenture are also involved in the trial.
Dubbed Project Jura, the two central banks will focus on wholesale transacting using a digital euro and a digital Swiss franc through a payment versus payment mechanism.
“The Banque de France is convinced of the potential benefits of wholesale central bank digital currency to provide maximum security and efficiency in financial transactions and opened last year an experimental program to make progress in this area,” the Bank of France Deputy Governor, Sylvie Goulard, said.
Accelerating CBDC Trials
Both the French and Swiss central banks have been experimenting with CBDC individually. The Bank of France became one of the first European central banks to test digital euros in real-world transactions with a private player.
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In addition, the Swiss counterpart was involved in CBDC development with BIS under an initiative called Project Helvetia.
“It is essential for central banks to stay on top of technological developments,” said Andréa M Maechler, Member of the Governing Board, Swiss National Bank. “We are looking forward to expanding this analysis to a cross-border context by participating in this exciting initiative.”
The Hong Kong arm of the BIS Innovation Hub started a similar alliance between the central banks of Hong Kong, China, and the UAE for experimenting with wholesale cross-border transactions.
“The experiment contributes to this work by exploring how wCBDC could enhance speed, efficiency and transparency in cross-border use cases. The BIS Innovation Hub facilitates central bank experimentation into technological public goods,” Benoît Cœuré, Head of the BIS Innovation Hub, added.