The Banque de France completed the last of its interbank settlements as part of CBDC experiments, demonstrating the possibility of direct ledger interoperability in a hybrid cloud environment across multiple technologies and asset classes.
Launched in March 2020, the French central bank has been at the forefront of an extended program to explore the potential of a digital euro, starting with a series of tests on interbank settlement.
Conducted in association with HSBC and IBM, the last test case consisted of the issuance of a digital bond on a blockchain and its subscription with settlement in CBDC.
The program involved an end-to-end transactional lifecycle of digital assets, through issuance, subscription by multiple actors and payment of coupons involving conversion to another currency. All of these transactions took place in different blockchain environments operated by HSBC for asset custody, and by the Banque de France for securities settlement and the CBDC. IBM’s Hyperledger Fabric-based and R3 Corda-based distributed registries were integrated using IBM Research’s Weaver interoperability tool.
Mark Williamson, Managing Director of GFX eRisk, Partnerships and Proposals at HSBC, said: âOur collaboration with IBM on this initiative has resulted in this important step in streamlining front-to-back securities and the DVP and PVP settlement processes. exchange rate. Interoperability between different DLTs and technologies was essential to show how to save time, reduce market risks and improve the security of transactions between central banks, commercial banks and, ultimately, our customers around the world.
IBM’s Weaver tool enabled the transfer of digital link data across chains, automatically and atomically triggering the settlement and accounting of securities, cash and currency flows in different environments, while ensuring that the Banque de France can control the use of central bank money.
Nathalie Aufauvre, Director General of Financial Stability and Operations at the Banque de France, said: âInteroperability between platforms is a key element in maximizing the benefits of distributed ledger technology applied to financial markets. By carrying out the transfer of data and assets, as well as the exchange of assets between different blockchains in an atomic manner, the Banque de France and HSBC have demonstrated the possibility of such interoperability, essential to ensure that multiple environments, on which the functioning of markets is based, can coexist. ”
She says the next installment of the bank’s ongoing CBDC experimentation will be primarily dedicated to cross-border transactions.