French, Swiss Central Banks Conclude Major CBDC Payments Test

The Bank for International Settlements (BIS), the Bank of France (BoF) and the Swiss National Bank (SNB) have concluded the combined study testing the wholesale use of central bank digital currency (CBDC) in international settlements between financial institutions.

Announced on Wednesday, the banks explored settling foreign exchange (FX) transactions in euro and Swiss franc wholesale CBDCs under Project Jura. The French and Swiss central banks issued, transferred and redeemed a tokenized euro-denominated French commercial paper.

Benoît Cœuré, Head of the BIS Innovation Hub, said: “Project Jura confirms that a well-designed wholesale CBDC can play a critical role as a safe and neutral settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term asset for international financial transactions.”

Many private companies, including Accenture, Credit Suisse, Natixis, R3, SIX Digital Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and UBS, also participated in the wholesale CBDC testing. The private banks in France and Switzerland explored direct transfers of euro and Swiss franc wholesale CBDCs on a third-party operated single distributed ledger technology platform.

The European participants settled the real-value CBDC transactions on a near-real setting and maintained regulatory requirements.

Testing CBDC in Real-World

Project Jura was first announced in June this year, which is one of the many such CBDC projects led by BIS. In addition, the Hong Kong arm of the BIS Innovation Hub is conducting similar CBDC studies with the central banks of Hong Kong, China and the UAE.

“As a small open economy, Switzerland requires efficient and robust cross-border payment and settlement arrangements. Project Jura explores how distributed ledger technology can be successfully leveraged to map out how future-proof cross-border settlement between financial institutions could look like,” said Andréa M Maechler, a member of the governing board at the Swiss National Bank.

“Jura demonstrates how wholesale CBDCs can optimize cross-currency and cross-border settlements, which are a key facet of international transactions,” Bank of France Deputy Governor, Sylvie Goulard said.