June 10, 2021 | AtoZ Markets–The BIS Innovation Hub, Swiss National Bank, Bank of France and a private sector consortium will collaborate in a wholesale CBDC (wCBDC) experiment.
Project will investigate the potential benefits and challenges of wCBDC in settling cross-border payments and digital financial instruments.
The BIS Innovation Hub, the Bank of France and the Swiss National Bank today announced that, together with a private sector consortium led by Accenture, they will conduct an experiment using wCBDC for cross-border settlement.
The private sector consortium includes Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS.
Remember that many central banks in the world are planning to use CBDC’s
How Will the Project Be?
It will be called Project Jura, and the experiment will explore cross-border settlement with two wCBDCs and a French digital financial instrument on a distributed ledger technology (DLT) platform.
This will involve exchanging the financial instrument against a euro wCBDC through a delivery versus payment (DvP) settlement mechanism and exchanging a euro wCBDC against a Swiss franc wCBDC through a payment versus payment (PvP) settlement mechanism. .
Also, these operations will be settled between banks domiciled in France and Switzerland, respectively.
BIS Innovation Hub
BIS Innovation Hub is dedicated to developing public goods in the technology space geared towards improving the functioning of the global financial system.
The BIS Innovation Hub have multidisciplinary teams located in Hong Kong SAR, Singapore and Switzerland, and will soon open centres in Toronto, London, Frankfurt,Paris and Stockholm, and has also formed a strategic partnership with the Federal Reserve System in New York.
Its president, Benoît Cœuré, highlighted that “The G20 has made enhancing cross-border payments a priority and laid out a multi-year roadmap to coordinate efforts.The experiment contributes to this work by exploring how wCBDC could enhance speed, efficiency and transparency in cross-border use cases”.
However, and for the clarity of all, the BIS has said that Project Jura it is of exploratory nature and should not be interpreted as an indication that the Bank of France or the Swiss National Bank plan to issue wCBDCs.
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