France, Singapore, Switzerland jointly test central bank digital currencies
2022.11.02 14:19
© Reuters.
LONDON (Reuters) – France, Singapore and Switzerland have launched a joint trial of their experimental central bank digital currencies (CBDCs) in the first cross-regional trial of its kind.
The project, which will run for around six months, will use what are known as automated market makers (AMM) for the cross-border exchange of “hypothetical” Swiss franc, euro and Singapore dollar CBDCs.
AMM protocols are designed to combine pooled liquidity with algorithms to determine the prices between two or more digitally tokenised assets such as currencies.
They are seen as having the potential to be the backbone of the financial market infrastructure needed for digital currencies to be traded between countries.
Cecilia Skingsley, at the Bank for International Settlements central bank umbrella group overseeing the project, which aims to deliver proof of concept by the middle of next year, said it marked the first collaboration across regions and that she expected more to follow.
Around 90% of the world’s central banks are either using, trialling or looking into CBDCs.
Most don’t want to be left behind by the advances of bitcoin and other cryptocurrencies, but are grappling with the complexities they bring, such wariness about the degree of control they could hand to governments.
