France and Singapore pilot cross-border CBDC transactions

The central banks of France and Singapore are working on a digital currency interoperability system supporting multiple global CBDCs.

Financial authorities in France and Singapore are actively exploring the cross-border applications of central bank digital currencies (CBDCs).

In a joint announcement on Thursday, the Bank of France and the Monetary Authority of Singapore (MAS) said that they successfully completed a whole cross-border payment and settlement experiment using CBDCs and blockchain technology.

The CBDC experiment was conducted with support and expertise from JPMorgan’s digital currency-focused Onyx division on a permissioned, privacy-enabled blockchain based on the investment bank’s Quorum blockchain infrastructure.

As part of the experiment, the Bank of France and MAS simulated cross-border and cross-currency transactions for a Singapore dollar-based CBDC and the euro.

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

The pilot has also demonstrated interoperability across different types of cloud infrastructure with blockchain nodes set up across private and public cloud infrastructures in France and Singapore. The Bank of France noted that the experiment is one of its latest achievements within its wholesale experiment program, which is set to be completed by fall 2021.

MAS chief fintech officer Sopnendu Mohanty said that the new development allows financial institutions across multiple countries to “transact with each other directly in different currencies.” “This m-CBDC experiment has broken new ground by decentralizing financial infrastructure, to improve liquidity management and market making services,” he noted.

The latest CBDC experiment marksa major milestone for the development of cross-border CBDC applications. As previously reported, JPMorgan’s Onyx participated in a cross-border CBDC pilot for the Central Bank of Bahrain in May. The U.S. megabank also partnered with Singapore’s largest bank, DBS, to launch a new company focused on cross-border transactions to complement the ongoing CBDC development.