The Swiss National Bank and the Bank of France announced that they will test Europe’s first cross-border digital currency payment. The two banks said in a statement today that the experiment will focus on wholesale lending between banks rather than day-to-day transactions.
The Bank of France (Banque de France) and the Swiss National Bank (SNB) are starting cross-border central bank digital currency trials. The name, which was determined as the “Jura Project”, was inspired by the Jura mountain that separates the two countries.
Transactions are between banks in the two countries.
In Project Jura, two wholesale CBDCs and a cross-border payment mechanism of a French digital finance instrument will be tested on a distributed ledger technology platform. The transaction will take place in the form of a wholesale swap of the financial instrument against euro CBDC and a wholesale swap of euro CBDC and Swiss franc CBDC. Transactions will be between banks in the two countries.
The SNB also announced that it would work with the Bank for International Settlements on the project, while a private sector consortium will be involved in the project.
In the consortium, there will be companies such as UBS, Credit Suisse, R3 from Switzerland, as well as SIX Digital Exchange and Natixis from France.
Finally, people can make instant payments.
The implementation of this technology means that payments can be made almost instantly, while both central banks will have to approve the transaction before payment digitally.
Wholesale CBDCs, which are generally restricted to financial institutions that hold accounts at central banks, differ from retail CBDCs that are open to the general public.
They are seen as the most popular offer among central banks because of their potential to make existing wholesale financial systems faster, cheaper and safer.Share this article