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Sunday, July 3, 2022

CBDC Demo Created By HSBC And IBM

Last Thursday saw both IBM and HSBC announce the successful testing of an advanced token which resulted in the creation of CBDCs. CBDCs or central bank digital currencies thus created would be emulated in a cloud environment, where the environment consisted of transactions made between the central bank, forex, and eBonds. The Hyperledger Fabric of IBM and the enterprise technology provider R3 Corda would serve as the basis of the distributed ledger that would facilitate the transactions. 

CBDC Could Help Financial Institutions

The project to create a CBDC was picked up by the central bank Banque de France, which formed a part of a series of tranche projects in order to implement a digital Euro. Previously, the Swiss and French central banks went out of their way to report a couple of positive results on a pilot run of the digital Swiss Franc as well as the Euro. Nevertheless, the two financial institutions do issue caution on the subject, where they have cited their regulatory concerns as well. 

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Mark Williamson, the managing director of GFX eRisk, partnerships, and propositions at HSBC, has stated that the interoperability across the different ledgers distributed and the technologies have been the major key in demonstrating how to go about and save time, reduce the risk in the markets, whilst improving the security for transactions between most central banks, commercial banks, and in time for the clients of the world through their regulated CBDCs. 

Likhit Wagle, the general manager of financial markets and global banking at IBM has stated that with the central banks around the world trying to explore the potential for CBDC to bring in a greater trajectory of security and transparency to financial transactions, this initiative does indeed provide quite a comprehensive roadmap for all those involved.

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