The Bank of France, Swiss National Bank, and the BIS Innovation Hub are collaborating with a private sector consortium to conduct an experiment exploring the use of wholesale central bank digital currency (wCBDC) for cross-border settlement.
While a retail CBDC would be available to the public, the use of a wCBDC is limited to financial institutions and government bodies.
The private sector consortium, led by Accenture, includes Credit Suisse, Natixis, R3, SIX Digital Exchange, and UBS.
Known as Project Jura, the experiment will explore cross-border settlement with two wCBDCs – one representing the Euro and another representing the Swiss franc - and a French digital financial instrument on a distributed ledger technology (DLT) platform.
These transactions will be settled between banks domiciled in France and in Switzerland, respectively.
In May, deputy governor for financial stability Jon Cunliffe and Bank of England governor Andrew Bailey said that the eventual introduction of a central bank digital currency (CBDC) is likely in the UK.
The news comes as 80 per of central banks are currently exploring CBDCs according to research by the Bank for International Settlements.
“The Eurosystem is engaging in innovation and adapting its actions to the strong trend towards the digitalisation of payments,” said Sylvie Goulard, Deputy Governor of the Banque de France. “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 programme to make progress in this area.”
She added: “In this perspective, we are delighted to be able to conduct an important experiment – called Jura – on cross-border settlement in partnership with the Swiss National Bank and the BIS Innovation Hub.”
“The G20 has made enhancing cross-border payments a priority and laid out a multi-year roadmap to coordinate efforts,” said Benoît Cœuré, Head of the BIS Innovation Hub. “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.”
He added: “We are excited to join this project, which complements other CBDC experiments that we are working on.”
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