Banque de France partners HKMA to explore interoperability between wholesale CBDC infrastructures
The Banque de France (BDF) has signed a memorandum of understanding with the Hong Kong Monetary Authority (HKMA) to explore how their differing infrastructures can support cross-border settlement using wholesale central bank digital currencies (wCBDCs), building on their mutual participation in the European Central Bank’s (ECB) Eurosystem CBDC exploratory project.
BDF partners HKMA to test wCBDCs for Eurosystem
The interoperability study will engage the BDF’s distributed ledger for securities settlement system, DL3S, and the HKMA’s Ensemble Sandbox, which launched this year as a means for the regulator to research and test tokenisation use cases.
The testing will focus on “real-time cross-border and cross-currency payments”, according to the central bank, and will explore the optimisation of settlement efficiency by strengthening the compatibility of financial market infrastructures between different jurisdictions.
Denis Beau, first deputy governor of the BDF, explains that the collaboration with the regulator will seek to test “different use cases for payment versus payment (PvP) between the tokenised form of the Hong Kong dollar and the Euro” under the “clear objective to improve cross-border payments”.
The Eurosystem, which comprises the ECB and 20 central banks across the European Union, first announced the arrival of its exploratory project in April last year. This initiative specifically seeks to analyse how wholesale financial transactions recorded on distributed ledger technology (DLT) platforms could be settled using CBDCs.
The ECB announced the first round of project participants, which includes the BDF, in April, before unveiling a second additional cohort, which brought the HKMA into the fold as a central bank DLT operator, in June.
From this month up until November, the group will be tasked with exploring the mock settlement of domestic payments, foreign exchange PvP transactions and “a wide set of securities-related use cases”, as per the ECB’s June announcement.
