December 08, 2021
New Report by Accenture, Banque de France, BIS Innovation Hub and the Swiss National Bank Outlines Novel Approach for Cross-Border Settlements
Demonstrates how wholesale central bank digital currency can be effectively utilized
NEW YORK, PARIS and ZURICH; Dec. 8, 2021 – The Banque de France, the Swiss National Bank and the BIS Innovation Hub, together with a private sector consortium led by Accenture (NYSE: ACN) have published a report that demonstrates a new approach for wholesale central bank digital currency (CBDC) in cross-border settlements.
It enables outright use of wholesale CBDC between regulated resident and non-resident financial institutions that if utilized could create meaningful improvements for international financial transactions.
The report is based on Project Jura, which explored cross-border settlement using two wholesale CBDCs and a digital financial instrument on distributed ledger technology (DLT) platforms based on real transactions compliant with existing regulatory frameworks.
“The global economy needs more efficient international payment and settlement arrangements to meet current needs and future demands,” said John Velissarios, managing director, global head of digital currency at Accenture. “Wholesale CBDC does show promise as a solution that can respond to new payment needs, support greater choice, competition and resilience.”
Settlement in wholesale CBDC could form part of a general trend towards greater diversification in payments. It could equip central bank money with new ways to simplify transactions, support future use cases, empower emerging payment players and ensure central banks can remain competitive against current and future challengers.
In the experiment, the wholesale CBDC is deployed on a single foreign third-party platform to complement other cross-border CBDC models while providing a new technical approach that may give central banks necessary controls and ensures interoperability between DLT-networks.
“Central banks today have a historical opportunity to respond and shape changes in payments. This project highlights that wholesale CBDC could help advance different settlement approaches, which could lead to a possible reorganization of capital and foreign exchange markets,” said David Treat, senior managing director at Accenture, global head of blockchain and multi-party systems at Accenture. “It highlights some of the benefits of shifting to new financial market infrastructures that leverages DLT-based systems.”
Project Jura is a public-private collaboration involving the Banque de France, the Swiss National Bank, and the BIS Innovation Hub together with an Accenture-led consortium that included Credit Suisse, Natixis, R3, SDX and UBS, with support from Heuking, Linklaters and OCTO Technology.
The project leveraged Accenture and OCTO Technology’s expertise in collaborative, multi-party system development, using Agile methodology, to build a Corda-based Digital Asset Registry (DAR) compliant with French regulation. The DAR confirms the potential of using DLT as an alternative means for issuing and keeping record of unlisted financial instruments.
This continues Accenture’s commitment to advancing the use of DLT-enabled platforms for payments and settlements. It builds on projects including E-krona with the Central Bank of Sweden, Khokha2 with the South African Reserve Bank, Jasper with the Bank of Canada and Ubin with the Monetary Authority of Singapore.
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