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The central bank’s digital currency experiment will test cross-border settlement of fiat currencies in France and Switzerland.
The Bank of France and the Swiss National Bank are collaborating with the Bank for International Settlements’ Innovation Hub to test “Project Jura,” a wholesale central bank digital currency (CBDC) system.
According to a release by the Bank of France on Thursday, the Project Jura pilot study will also draw participation from a private consortium led by global service company Accenture. Other establishments in the private consortium include Credit Suisse, UBS, SIX Digital Exchange and R3.
The experiment will reportedly use two wholesale CBDCs — one pegged to the euro and the other pegged to the Swiss franc. According to the announcement, the process will involve the exchange of financial instruments against each wholesale CBDC via a delivery versus payment settlement apparatus.
As part of the statement, the Bank of France announced that both sides of the transaction will be settled in banks based in the two nations.
Jura is an offshoot of the French central bank’s substantial work on CBDCs, in which several large European financial institutions have participated. The central bank chose eight financial institutions to test its interbank CBDC initiative in July 2020.
Cointelegraph earlier revealed that the Bank of France agreed to invest $2.4 million in a CBDC pilot programme in December 2020.
However, the Bank of France circular clarified that Project Jura remains an exploratory study and does not indicate any plans to issue a CBDC by another of the participating central banks.
International collaboration is increasingly becoming a focus of CBDC development, with attempts being made to build workable protocols for cross-border settlements among central banks. In Asia, Hong Kong and China are experimenting with cross-border use of the latter’s digital yuan.
Indeed, Hong Kong and China are both part in a larger cross-border CBDC scheme, as are the central banks of Thailand and the UAE. The Eastern Caribbean Central Bank CDBC “DCash” became active in four of the currency union’s eight member countries in April.