In a hybrid cloud environment, HSBC and IBM have successfully tested an advanced token and digital wallet settlement capability that includes direct transactions between two central bank digital currencies (CBDC). Experiments were conducted between CBDCs, eBonds, and forex. R3’s Corda and IBM’s Hyperledger Fabric were used as the basis of the distributed ledger that facilitated the transaction.
Within a four-month period, the experiment, designed and implemented across multiple ledgers, was successfully implemented to support such a complex multi-asset transactional scenario.
HSBC, a leading foreign exchange bank, and IBM, a leading technology and consulting company, were chosen out of a selection of highly regarded financial and technology companies.
This was one of a series of tranche projects overseen by the central bank Banque de France to implement a digital Euro. In a previous pilot project, the French and Swiss central banks successfully tested the digital Swiss Franc and Euro. Both financial institutions, however, expressed caution on this issue, citing regulatory concerns.
“We were pleased to be selected by Banque de France to conduct this exciting experiment. 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 is 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.”
Mark Williamson, Managing Director GFX eRisk, Partnerships & Propositions at HSBC
“Our collaboration with HSBC, a leader in foreign exchange trading, and Banque de France, a pioneer in the use of central bank digital currency, to create a foreign exchange settlement capability that has the potential to reduce costs and improves security, is an important accomplishment that stands to benefit the global financial services industry broadly, As central banks around the world begin to explore the potential for CBDC to bring greater transparency and security to financial transactions, this initiative provides a comprehensive roadmap. ”
Likhit Wagle, General Manager Global Banking & Financial Markets at IBM.
