Central Bank Digital Currencies: the "European" test succeeds

Here's how the Schweizerische Nationalbank, Banque de France and the BIS successfully piloted the cross-border use of wholesale CBDCs

Le Digital Coins di Central Bank ( "Central Bank Digital Currency“, known by the acronym CBDC) can be used effectively for international settlement between financial institutions.
This is what emerges from the most recent experimentation on CBDC for financial institutions (CBDC in bulk or "wholesale CBDCs") conduct, under the name of "Jura project", from the Swiss National Bank (BNS), gives Bank of France (Bdf) and from Bank for International Settlements (BRI).

The report “Wholesale Central Bank Digital Currency Experiments with the Banque de France”

Digital currency transactions in euros and Swiss francs under scrutiny

The program has just finished aimed to test the settlement of foreign exchange transactions in euros and wholesale digital francs as well as the issuance, transfer and repurchase, between French and Swiss financial institutions, of a tokenized French commercial paper denominated in euros.
Made in collaboration with a group of private sector companies, including Accenture, Credit Suisse, Natixis, R3, SIX Digital Exchange e UBS, The "Jura project” continued the work carried out by BNS and from BIS Innovation Hub within the framework of the "Helvetia project” and is part of a series of experiments on CBDC in bulk initiated by Bank of France in 2020.
The "Jura project” contributed to the ongoing work of the G20 on cross-border payments, was exploratory in nature “and should not be interpreted as indicative of the intention of the BNS or Bdf to issue Wholesale CBDCs”, reads a note sent by Swiss National Bank to the mass media.

Video, so the digital currency issued by a central bank

Single platform based on “Distributed Ledger Technology”

The goal of the "Jura project” was to analyze how wholesale digital euros and francs can be transferred directly, between French and Swiss commercial banks, via a single platform based on the “distributed ledger technology” and operated by third parties.
The settlement of assets tokenized e currency operations took place in a secure and efficient manner using payment-versus-payment mechanisms ("payment versus payment“) and delivery against payment (“delivery versus payment").
The experimentation was conducted in a near-real environment, proceeding with actual transfers of values ​​and in compliance with the regulatory requirements in force.
The issuance of Wholesale CBDCs on a third-party platform and providing direct access to central bank money to regulated non-resident financial institutions raises complex issues of monetary policy.

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“Subnet integration” plus a “dual-notary signing” system

The "Jura project” examined a new approach involving the integration of subnets (“subnetworks“) and a system “dual notary signing” and that could boost central bank confidence regarding both issuance Wholesale CBDCs on third-party platforms, both access to Wholesale CBDCs for non-resident financial institutions.

Andréa Maechler: “Very useful for a small open economy”

“A small, open economy like Switzerland needs efficient and robust systems for cross-border payment and settlement. The 'Jura Project' examines how to exploit the potential of 'distributed ledger technology', in order to outline what cross-border settlement between financial institutions could look like in the future”Said Andrea Michaela Maechler, member of the Governing Board of the SNB.

Sylvie Goulard: "The Bank of France experiment is positive"

“The extremely positive outcome of the 'Jura Project' closes the experimentation program on wholesale CBDCs launched by the Banque de France in 2020. It demonstrates how they can optimize settlement between different currencies and countries, a key component of transactions international"he said sylvie goulard, deputy governor of the Banque de France.

Benoît Cœuré: “An example of promoting innovation”

“The 'Jura Project' confirms that a well-designed wholesale CBDC can play a key role as a safe and neutral asset for the settlement of international financial transactions. It is also an example of the possibilities for international cooperation between central banks and the private sector to foster innovation."he concluded Benoît Cœure, responsible for the BIS Innovation Hub.

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