Tokenized Correspondent Banking Experiment: a Key Step Towards an Open and Interoperable Standard

The experiment focused on deposit accounts held on-chain by several banks with payments using a tokenized correspondent banking model and settlements conducted using wholesale CBDC (wCBDC). It aimed at demonstrating the feasibility of a platform-less blockchain protocol, proving that transactions can be securely settled without the need for a centralized platform operator.
The experiment successfully demonstrated the feasibility of a platform-less blockchain model for Correspondent Banking, using the open-source so|cash protocol and Banque de France’s DL3S system. Following on from the article published here, here are key learnings of the experiment.

Key learnings of the experiment

This model enables seamless interoperability between on-chain cash accounts and wholesale Central Bank Digital Currency (wCBDC), facilitating frictionless interbank payments and enhancing the efficiency of cross-border transactions. The integration of these technologies allows for automated liquidity management through atomic transactions, optimizing intraday liquidity and reducing settlement risks. Furthermore, the decentralized nature of the so|cash protocol ensures that banks retain control over their smart contracts while operating under a shared open standard, fostering a collaborative and secure environment. The ability to execute real-time, 24/7 settlements introduces a paradigm shift in cash management services, unlocking new opportunities for corporate treasury operations and enabling more dynamic financial management strategies. 

This experiment paves the way for broader adoption of open, decentralized financial infrastructures, enhancing efficiency, security, and resilience in the banking sector.

The experiment also benefited greatly from the guidance of White & Case (Paris office), which provided legal expertise, and the coordination of KPMG France, which ensured efficient project management and expertise.
Additionally, this initiative relied on the support of several interbank partners acting as observers, including BNP Paribas, Santander, SEB, and Societe Generale, sharing insights and demonstrating an interest for a shared standard within the industry.

Read more about our findings and the trends for the future of digital money with this report! Will open in a new tab