On Wednesday, the Banque de France (BdF), the BIS Innovation Hub (BISIH) and the Swiss National Bank (SNB) Announced the success of a pilot test of a wholesale central bank digital currency (wCBDC), titled Project Jura. The project, which aimed to investigate cross-border settlement with wCBDC in euros and Swiss francs, was launched on a third-party distributed ledger technology platform.
The experimental technology explored in the Jura Project consisted of a decentralized network between pairs of computing nodes (Corda) to validate transactions and, at the same time, ensure that all legal, regulatory and commercial rules of the ruling nations are adhered to. Then there was the tokenization of the aforementioned fiat currencies and the Negotiable European Commercial Paper, a debt instrument with a short-term maturity (one year or less) denominated in euros. Lastly, the Jura Project examined infrastructure networks that enable real-time gross transaction settlement, bond digitization, and a digital asset register.
Although the test was successful, it does not guarantee issuance of a wCBDC by Swiss, French or European Union authorities. The report concluded that "wCBDCs could be incorporated into novel settlement arrangements that could change the structure and functioning of capital markets, money markets, and currency markets," saying that:
"Expanding the use of central bank money through broader access or greater cross-border settlement could catalyze these changes, as could a deeper integration of currencies with other digital assets and securities."
Experimental architecture of digital EUR / CHF | Source: BISIH
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