HSBC and IBM successfully test multi-ledger CBDC, bond and FX settlement capability

Cross-border, cross-CBDC and digital currency, cross-asset, cross ledger, end-to-end securities and foreign exchange transactions successfully executed.

HSBC and IBM have successfully tested an advanced token and digital wallet settlement capability encompassing direct transactions between two central bank digital currencies (CBDC) in a hybrid cloud environment.

The experiment, designed and implemented within a four-month period, was successfully executed across ledgers in support of such a complex multi-asset transactional scenario.

Several previous initiatives have individually demonstrated support for CDBCs, securities and/or foreign exchange.

The experiment successfully tested an end-to-end transactional lifecycle covering CBDCs, eBonds, and foreign exchange. It was conducted in a hybrid cloud environment incorporating public and private clouds and on-premises data sources.

Distributed ledgers based on IBM’s Hyperledger Fabric and R3’s Corda were integrated using IBM Research’s Weaver interoperability tool.

The project was initiated by Banque de France – which has emerged as a leader among central banks in its breadth of CDBC experimentation – as part of a multi-pronged program to explore the potential of the digital Euro.

HSBC, one of the world’s largest foreign exchange banks, and IBM, a leading provider of consulting services and technology to the financial services industry, were chosen from a diverse field of highly-regarded financial and technology applicants.

“We were pleased to be selected by Banque de France to conduct this exciting experiment,” said Mark Williamson, managing director GFX eRisk, Partnerships & Propositions at HSBC.

“Our collaboration with IBM on this initiative has resulted in this milestone of streamlining front-to-back securities and foreign exchange DVP and PVP settlement processes. Interoperability across different DLTs and technologies was key in demonstrating how to save time, reduce market risk and improve security for transactions between central banks, commercial banks and, in time, our clients around the world.”