HSBC and IBM successfully create a multi-ledger CBDC demo

On Thursday, HSBC and IBM announced the successful testing of advanced token and digital wallet settlements between two central bank digital currencies (CBDCs) in a cloud environment. Trials include transactions between CBDC, eBond and foreign exchange. IBM's Hyperledger Fabric and enterprise technology provider R3's Corda serve as the basis for the distributed ledger, facilitating transactions.

The project, overseen by the Bank of France, is part of a series of phased projects to implement a digital euro. Earlier, the National Bank of France and the Swiss National Bank reported positive results from pilots of a digital euro and a digital Swiss franc. However, the two financial institutions have sounded the alarm, citing regulatory concerns.

Mark Williamson, Managing Director of GFX eRisk, the partnership and advice arm of the HSBC Group, said:

Interoperability between different distributed ledgers and technologies is the key to demonstrating how to save time, reduce market risk and improve security for transactions between central banks and commercial banks, and how to provide services to our customers around the world in a timely manner .

Likhit Wagle, General Manager, IBM Global Banking and Financial Markets, added:

The project provides a comprehensive roadmap as central banks around the world begin to explore the potential of CBDCs to increase the transparency and security of financial transactions.

CBDCs are gaining traction around the world, in part because they can be used as a means to counter the rise of stablecoins, which to some are a threat to the financial system. This month alone, the Reserve Bank of Australia’s Project Atom CBDC study found numerous benefits for CBDCs. Around the same time, Kazakhstan’s central bank reported positive results from its CBDC pilot project. The Eastern Caribbean CBDC expands to two more countries, while Russia is prioritizing the development of a digital ruble.

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