The central banks of Switzerland and France are joining hands with the Bank for International Settlements to test wholesale central bank digital currencies in cross-border transactions. The experiment will be conducted with the help of a private sector consortium led by Accenture.
European Central Bank to collaborate on CBDC project
Swiss National Bank (SNB), Banque de France and the Bank for International Settlements (BIS) Innovation Hub announced this week that they will collaborate in a trial exploring the use of wholesale central bank digital currencies (CBDCs) for cross-border settlements . . The trials will be supported by an Accenture-led private sector consortium that also includes Credit Suisse, Natixis, R3, Six Digital Exchange and UBS.
— Bank for International Settlements (@BIS_org) 10 June 2021
The project is named “Jura”, after the mountain range that demarcates a long stretch of the French-Swiss border. The experiment will focus on cross-border settlements operated by two wholesale CBDC and a French digital financial instrument on a distributed ledger technology (DLT) platform, SNB detailed in a press release published on Thursday.
The trial will involve “exchange of financial instruments against euro wholesale CBDCs through distribution versus payment (DVP) Payment Vs Payment Via Settlement Mechanism and Exchange of Euro Bulk CBDC Against Swiss Franc Wholesale CBDC (pvp) settlement mechanism.” The transaction will be settled between banks based in France and Switzerland, the SNB emphasized in detail:
It is essential for central banks to stay on top of technological developments.
Project Jura to Test the Effectiveness of Bulk CBDCs in Cross-Border Settlements
Dozens of central banks around the world are working on projects to issue CBDCs, including Chinahandjob Russia, the America, And this Eurozone. The People’s Bank of China is arguably the most advanced project, with many home test Already underway and plans to test digital yuan (e-CNY) across the border Transactions with Hong Kong. Bank of France launched its wholesale CBDC program last year. Its deputy governor, Sylvie Goulard, recently commented:
Eurosystem continues to innovate and adapt its actions to the strong trend towards the digitization of payments. The Banque de France wholesale central bank is confident about the potential benefits of digital currency.
Central banking institutions noted that Jura is of an exploratory nature and should not be interpreted as an intention to issue bulk CBDCs. At this stage, the project is primarily aimed at examining the effectiveness of wholesale central bank digital currencies for cross-border settlements.
According to Benot Coure, Head of the BIS Innovation Hub, this experiment will contribute to further the G20’s priority to enhance cross-border payments by exploring how wholesale CBDCs can increase speed, efficiency and transparency in such scenarios.
“We are excited to be involved in this project, which complements other CBDC experiments that we are working on,” the official said.
What do you think about the Jura Wholesale CBDC project? Share your thoughts on this topic in the comment section below.
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