France and Singapore Announce Successful Cross-Border CBDC Testing

The central banks of France and Singapore have announced the successful completion of their cross-border payment and settlement experiment using central bank digital currency(CBDC). As part of the experiment, the French central bank worked with the Monetary Authority of Singapore(MAS) to simulate several transactions between a Singapore dollar-based CBDC and the euro. The experiment was carried out with the help of JPMorgan’s Onyx suite of applications, which uses a system of automated digital contracts. 

France and Singapore Conclude Pilot Testing of Cross-Border CBDC Transactions

The Bank of France and MAS issued a joint statement that marked the conclusion of a pilot project aimed at testing cross-border CBDC transactions. The test was part of the French central bank’s wholesale experiment program, which will fulfill its goals by Fall 2021. 

“While the experiment was limited to two central banks, the design of the m-CBDC network enabled it to be scaled up to support the participation of multiple central banks and commercial banks located in different jurisdictions,” the statement reads.

The experiment successfully demonstrated interoperability across different types of cloud infrastructure with blockchain nodes set up across the public and private cloud infrastructures in Singapore and France. Additionally, the design of the m-CBDC(multiple CBDCs) network-enabled the financial authorities of both countries to have visibility on cross-border transactions, while each country retained independent control over the issuance and distribution of its own CBDC.

Experiment Opens Opportunities for Multiple CBDCs

Valérie Fasquelle, the director of Infrastructure, Innovation, and Payments at the Bank of France, said that the pilot will help improve cross-border payments and open the possibility of connecting with other CBDCs in the world. 

“By experimenting the circulation of EUR CBDC in a shared corridor network, Banque de France and MAS tested the possibility to provide a link with other CBDCs all over the world. It is an opportunity to construct arrangements for multiple CBDCs models, improving cross-border payments and increasing harmonization of post-trade procedures,” Fasquelle stated.

With the latest accomplishment in CBDC testing, institutions are coming closer to realizing a system that runs on e-currencies. And it seems JPMorgan’s Onyx is a significant aid to central banks and authorities in this quest. The technology suite was previously used by the Central Bank of Bahrain during its CBDC test carried out in May. Onyx also partnered with Singapore-based multinational bank DBS to launch a blockchain-powered cross-border payments platform as part of the ongoing CBDC development effort.