The Banque de France, the Swiss National Bank and the innovation center of the Bank for International Settlements (BIS) are teaming up to experiment with the use of “wholesale” central bank digital currency (MNBC), that is to say say dedicated to financial intermediaries, for cross-border payments.
Speed up payments
Indeed, wholesale MNBCs could “increase the speed and efficiency and transparency of cross-border use cases “, explained Benoît Cœuré, who heads the BRI innovation hub.
As a reminder, unlike a cryptocurrency that is exchanged peer to peer outside a state system, a central bank digital currency abbreviated “MNBC” is only a virtual representation of a managed fiat currency. by a central bank.
The three partners will form a temporary group of companies (GME) led by Accenture. Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS are also participating in this experiment, called the “Jura project”. The aim is to analyze cross-border settlements made via two wholesale MNBCs, in euros and Swiss francs, as well as a French digital instrument, all on a platform using distributed ledger technology (DLT).
This project involves exchanging a digital financial instrument for a wholesale euro MNBC via a delivery versus payment settlement mechanism and exchanging a wholesale euro MNBC for a wholesale Swiss franc MNBC via a settlement mechanism payment against payment. These transactions will be settled between banks domiciled in Switzerland and France respectively.
Projects launched in 2020
“Staying at the cutting edge of technology is essential for central banks“said Andréa M. Maechler, member of the Executive Board of the Swiss National Bank. In 2020, the Banque de France and the Swiss National Bank each launched similar projects.”The Banque de France launched an experimental program last year to make progress in this area“, detailed Sylvie Goulard, Deputy Governor of the Banque de France. For its part, the Swiss institution launched the Helvetia project in December 2020 to analyze the settlement of” tokenized “assets in wholesale MNBCs.
The United States is also looking into this subject. In early May, Accenture and the Digital Dollar Foundation announced the launch of five pilot projects around an MNBC. These private projects will be funded by Accenture and will involve financial companies, retailers and non-governmental organizations. The goal is to generate data that can help US decision makers develop a digital dollar later.