Banque de France Launches Ledger Interoperability In CBDC Tests – Cryptovibes.com – Daily Cryptocurrency and FX News
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The Banque de France has finished setting up the last of its interbank settlement in CBDC experiments. Through these experiments, the bank has demonstrated the possibility of direct ledger interoperability in a hybrid cloud environment across many technologies and asset classes.
Unveiled in March 2021, the French central bank has been a leader of a prolonged program to explore the possibility of a digital euro, starting with a series of tests targeting the interbank settlement sector. These tests were done in association with IBM and HSBC. The latest of these tests comprised of the issuance of a digital bond on a blockchain and its subscription with a settlement in central bank digital currency (CBDC).
That program consisted of an end-to-end transactional lifecycle of digital assets, via issuance, subscription by multiple actors, and coupon payment that featured a conversion into other currencies. All of these transactions happened across various blockchain environments that are operated by HSBC for assets custody and by the Banque de France for the securities settlement and the CBDC.
Distributed ledgers powered by IBM’s Hyperledger Fabric and R3’s Corda were linked using the IBM Research’s Weaver interoperability tool. The managing director GFX eRisk, partnerships & propositions at HSBC, Mark Williamson, stated:
“Our collaboration with IBM on this initiative has resulted in this milestone of streamlining front-to-back securities and foreign exchange DVP and PVP settlement processes. Interoperability across different DLT’s and technologies was key in demonstrating how to save time, reduce market risk and improve security for transactions between central banks, commercial banks, and in time our clients around the world.”
IBM’s Weaver tool supported the transfer of the data to link with the digital bond across chains, to automatically and atomically trigger the settlement and accounting of the cash, securities, and foreign exchange flow in different environments, while ensuring that Banque de France maintains the control of the usage of central bank money.
The director-general of financial stability and operations working at the Banque de France, Nathalie Aufauvre, said:
“Interoperability across platforms is a key element to maximize the benefits of the distributed ledger technology applied to financial markets. By achieving the transfer of data and assets, as well as the exchange of assets across different blockchains in an atomic way, the Banque de France and HSBC have demonstrated the possibility of such interoperability, essential to ensure that the multiple environments, on which the efficient functioning of markets rely, can coexist.”
She believes that the next tranche of the bank’s continuing CBDC experimentation will be mainly dedicated to cross-border transactions.
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