Wholesale CBDC Would Improve Cross-Border Payments
The French Central Bank announced on Friday that its wholesale central bank digital currency (wCBDC) will increase cross-border payments, settlement finality, and security for a wide range of financial assets after undertaking multiple tests utilising crypto technology.
“Through these experiments, the Banque de France shows the operational feasibility and practical implementation of the three models it has conceptualised for issuing wCBDC directly on DLT,” the central bank said, adding that different types of DLT were used to test applications in asset tokenization and the improvement of cross-border transactions.
A wholesale CBDC is crucial for native digital assets and tokenized assets that cannot be settled. Central banks worldwide are experimenting with CBDCs to improve wholesale settlements, with BIS leading multiple tests. India has begun similar tests, and the European Central Bank is set to start in 2024. Supporting Europe’s exploratory work is one of the next steps.
(With inputs from Shikha Singh)
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