Interest in wholesale CBDCs (wCBDCs) has grown considerably over recent years, with numerous projects now looking at FX use cases and PvP transactions.

Between 2017 and 2023, at least 40 wCBDC project reports were published. A number of these projects have increasingly explored creative and thought-provoking designs for cross-border and cross-currency payments, including PvP solutions. Projects have primarily considered technological feasibility rather than legal, regulatory, governance and political challenges.

Though wCBDC experiments vary in technical approaches, most have aimed to provide ‘instant’ settlement on a 24/7 basis, which would not be easy in the current FX market.

The jury is still out on the role wCBDCs could play in cross-border payments, wholesale PvP settlement and the FX ecosystem generally, and further analysis should consider legal, regulatory, governance, political and other non-technical issues.

We will continue to monitor this exciting area of development and innovation through collaboration with key industry participants. Our involvement in the Swift CBDC sandbox has provided valuable insights into how netting and settlement of cross-currency payments could be designed in a CBDC world, while our contribution to the World Economic Forum’s report has enhanced our knowledge of the role wCBDCs may play in the digital payments space.