Central banks of France and Switzerland announce successful test of digital euro and Swiss franc
On Wednesday, the Banque de France (BdF), the BIS Innovation Hub (BISIH) and the Swiss National Bank (BNS) announced the success of a pilot trial of a wholesale central bank digital currency (wCBDC), titled Project Swear. The project, which aimed to investigate cross-border settlement with euro and Swiss franc wCBDCs, was launched on a third-party distributed ledger technology platform.
Although the project was successful, central banks warned that important sets of rules, emergency procedures and supervisory capacity were needed to ensure a successful CBDC.
The experimental technology explored in the Jura project consisted of a decentralized network of peer-to-peer computing nodes (Corda) to validate transactions while simultaneously ensuring that all legal, regulatory, and business rules of the governing nations are followed.
Then there was the tokenization of the aforementioned fiat currencies and the Negotiable European Commercial Paper, a short-term (one year or less) debt instrument denominated in euros. Finally, Project Jura looked at infrastructure networks enabling real-time gross settlement of transactions, digitization of bonds and a digital asset register.
Although the trial was conclusive, it does not guarantee the issuance of a wCBDC by the Swiss, French or European Union authorities. The report concludes that “wCBDCs could be incorporated into new settlement agreements that could change the structure and functioning of capital markets, money markets and foreign exchange markets”, stating that:
“Expanding the use of central bank money through greater access or increased cross-border settlement could catalyze these changes, as could further integration of currencies with other digital assets and securities. “
Digital EUR / CHF experimental architecture
Par Zhiyuan Sun, Cointelegraph
Zhiyuan Sun is a technology writer at Cointelegraph. First trained in mechanical engineering at university, he quickly developed a passion for cryptocurrencies and finance. He has several years of writing experience for major financial media such as The Motley Fool, Nasdaq.com and Seeking Alpha. When he’s away from his enclosure, he can be found in his deep-water scuba gear.
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