The central banks of Switzerland and France work with the Bank for International Settlements to test the digital currencies of the wholesale central banks in cross-border transactions. The experiment is being carried out with the help of a private sector consortium led by Accenture.
European central banks cooperate on the CBDC project
The Swiss National Bank (SNB), the Banque de France and the Bank for International Settlements (BIS) innovation hub announced this week that they will be collaborating on trials exploring the use of large-scale digital currencies (CBDCs) for cross-border settlements exploring. The tests are supported by a private sector consortium led by Accenture, which also includes Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS.
– Bank for International Settlements (@BIS_org) June 10, 2021
The project is named “Jura” after the mountain range that delimits a long section of the French-Swiss border. The experiment will focus on cross-border settlements operated by two wholesalers CBDCs and a French digital financial instrument on a distributed ledger technology (DLT) the SNB is described in detail in a press release published on Thursday.
The examination includes “the exchange of the financial instrument for a euro wholesale CBDC by delivery against payment (DvP) Settlement mechanism and the exchange of a Euro CBDC wholesale for a Swiss franc wholesale CBDC through payment against payment (PvP) Settlement mechanism. “The transactions are carried out between banks based in France and Switzerland, explained the SNB and emphasized:
It is important for central banks to keep abreast of technological developments.
Project Jura tests the effectiveness of wholesale CBDCs in cross-border settlement
Dozens of central banks around the world have worked on projects to issue CBDCs, including China, Russia, the United States, and the Eurozone. People’s Bank of China has arguably the most advanced project, with numerous domestic trials and plans to test the digital yuan (e-CNY) in cross-border transactions with Hong Kong. The Bank of France launched its CBDC wholesale program last year. His Deputy Governor Sylvie Goulard recently commented:
The Eurosystem focuses on innovation and adapts its actions to the strong trend towards the digitization of payment transactions. Banque de France believes in the potential benefits of the central bank’s wholesale digital currency.
The central banks noted that Jura is exploratory in nature and should not be interpreted as an intent to issue CBDCs for large customers. In this phase, the project mainly aims to examine the effectiveness of central bank digital wholesale currencies for cross-border settlement.
According to Benoît Cœuré, head of the BIS Innovation Hub, the experiment will help advance the G20’s priority of improving cross-border payments by examining how wholesale CBDCs can increase speed, efficiency and transparency in such scenarios.
“We are excited to be part of this project, which complements other CBDC experiments we are working on,” added the official.
What do you think of the Jura wholesale project CBDC? Do share your thoughts on the matter in the comments below.
Photo credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.