Commercial Payments International

The Banque de France (Central Bank of France) and the Monetary Authority of Singapore (MAS) have announced the completion of a wholesale cross-border payment and settlement experiment using central bank digital currency (CBDC). This cross-border payment experiment was supported by J.P. Morgan’s Onyx, which simulated cross-border transactions involving multiple CBDCs (m-CBDC) on a common network between Singapore and France.

According to the press note, this was the first m-CBDC experiment that applied automated market-making and liquidity management capabilities to reap cross-border payment and settlement efficiencies.

The press release states the current difficulties faced by cross-border payments such as limited transparency on foreign exchange rates, restricted operating hours of payment infrastructures and currency settlement delays due to differences in time zones and to overcome this m-CBDC was used in the experiment.

The experiment conducted simulated cross-border and cross-currency transactions for Singapore Dollar (SGD) CBDC and €uro (EUR) CBDC were conducted using permission, privacy-enabled blockchain based on Quorum technology.

The press note also emphasized that while this ‘experiment was limited to two central banks, the design of the m-CBDC network enables it to be scaled- up to support the participation of multiple central banks and commercial banks located in different jurisdictions’.

“Building a multi-currency shared ledger infrastructure allows participants across countries to transact with each other directly in different currencies”, said Sopnendu Mohanty, Chief FinTech Officer of MAS. Adding further, “This m-CBDC experiment has broken new ground by decentralizing financial infrastructure, to improve liquidity management and market-making services. It charts the path for scalable CBDC networks where central banks and commercial banks can work together to achieve the vision of cheaper, safer and more efficient infrastructure for cross border payments.”