Central banks of Switzerland and France trial Europe's first cross-border digital currency payments, focusing on the bank-to-bank wholesale lending market
ZURICH/LONDON (Reuters) - The Swiss National Bank and the Bank of France will trial Europe's first cross-border central bank digital currency payments …
Context & Ripple Effects
This June 2021 pilot is the seed of a line of work that has since grown substantially: the Swiss National Bank and Bank of France testing direct central-bank-to-central-bank settlement in wholesale lending. Later coverage shows where it led — a [[a:971957|consortium of France's largest financial market participants ran a ten-month blockchain experiment using Banque de France's digital currency]], and by 2023 the BIS had extended the same France-Switzerland pairing into cross-border wholesale CBDC trading tested with DeFi techniques.
The arc matters because Switzerland is positioning itself deliberately: officials are pushing to lead the global asset-tokenization race partly to offset perceptions of a diminished banking industry, per Bloomberg's look at the country's strategy. The wholesale focus here — bank-to-bank lending rather than retail payments — keeps this distinct from the consumer-facing digital euro track.
First-order effects
- Banks operating in the Swiss-French corridor gain a first live template for settling cross-border wholesale lending in central bank money directly, bypassing correspondent-bank intermediation for those flows.
- The two central banks establish themselves as Europe's earliest movers on cross-border wholesale CBDC, ahead of any euro-area-wide framework.
Second-order effects
- The BIS built its later multi-country test — adding Singapore to the French and Swiss pair and applying DeFi-style automated trading to wholesale CBDCs — directly on this bilateral foundation, turning a national experiment into an international standards effort.
- The ECB's separate retail track, which selected vendors including Amazon, Nexi, and CaixaBank to prototype digital euro interfaces, now runs parallel to this wholesale work, forcing European banks to prepare for both rails at once.
Third-order effects
- If Switzerland's broader tokenization push holds, wholesale CBDC settlement becomes infrastructure for tokenized securities markets — central banks acting not as payments regulators but as settlement-layer operators for capital markets.
- Cross-border wholesale CBDC corridors, proven bilaterally and then via the BIS, point toward a structural shift where correspondent banking relationships lose their monopoly on interbank settlement, with the incumbent correspondent banks' fee base as the exposed position.
The trend: Central banks are moving from domestic CBDC pilots to cross-border wholesale settlement networks, with the Swiss-French corridor serving as Europe's proving ground and the BIS scaling it internationally.