Thursday, HSBC and IBM announced a successful attempt at advanced settlement of digital tokens and wallets between two central bank digital currencies or CBDCs in a cloud environment. The experiment consisted of transactions between CBDCs, eBonds and currencies. Hyperledger Fabric from IBM and Corda from enterprise technology provider R3 served as the basis for the distributed ledger.
The project was overseen by the central bank, Banque de France, as part of a series of tranche projects to implement a digital euro. The French and Swiss central banks had previously reported positive results in a pilot test of the digital Swiss franc and the euro. However, the two financial institutions were cautious in this regard and referred to regulatory problems.
Mark Williamson, Managing Director of GFX eRisk, Partnerships Propositions at HSBC said:
“The interoperability between the various distributed ledgers and technologies was key to showing how to save time, reduce market risk and improve the security of transactions between central banks, commercial banks and, at the same time, our customers from around the world.”
Likhit Wagle, Managing Director of Global Banking and Financial Markets at IBM added:
“As central banks around the world begin to explore the potential of CBDCs to add transparency and security to financial transactions, this initiative offers a comprehensive roadmap.”
CBDCs are gaining traction around the world, in part because of their usefulness as a means of combating the rise of stablecoins, which for some pose a threat to the financial system. As recently as this month, research by the Reserve Bank of Australia’s Atom CBDC Project uncovered numerous benefits. At the same time, the Central Bank of Kazakhstan reported the positive results of its CBDC pilot project. The CBDC in the Eastern Caribbean has expanded to two more countries, and Russia is prioritizing the development of a digital ruble.