Two central banks of European nations in France and Switzerland have started a joint cross-border trial for the central bank’s digital currency (CBDC).
According to a report by Bloomberg, the wholesale trial involves private financial sector players and was designed by the Bank for International Settlements (BIS) innovation hub.
“The G20 has made improving cross-border payments a priority,” Benoit Coeure, head of the BIS Innovation Hub, is quoted as saying. “This experiment contributes to this work by examining how wholesale CBDC could improve speed, efficiency and transparency in cross-border use cases.”
The CBDC studies cover the cross-border settlement of two central bank digital wholesale currencies, including exchanging a financial instrument for a Euro CBDC. Participating private sector actors include UBS Group AG, Credit Suisse Group AG, Accenture Plc and Natixis SA.
In the joint declaration of the plan, both the central banks of France and Switzerland noted that the push for this CBDC study is not a final decision to issue a CBDC on either end.
CBDC’s chase-picking pace
In 2021, the number of world economies doubled in their quest for a digital central bank currency, either by starting initial research or developing the use case for the proposed new forms of money. In particular, China is pushing the retail tests of its Digital yuan with the last bill for Shanghai.
Hong Kong reiterated its pursuit of its e-HKD when it recently added the CBDC as part of its roadmap for fintech growth through 2025. The Federal Reserve Bank of America and the Bank of England are also keeping track of their CBDC activities. While the former published a discussion paper for the Digital Dollar, the latter set up a joint committee to design the use cases for the proposed CBDC.
Other nations with CBDC engagements include Israel, South Korea and Kazakhstan.
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