Temenos Leads the Way in CBDC Innovation with R3

Temenos (SIX: TEMN) today announced that it has proven integration of its leading banking platform with multiple DLT-based Central Bank Digital Currency (CBDC) technology stacks, successfully executing end-to-end retail CBDC use cases for commercial bank touch points. These included central bank token issuance to commercial bank wallets, customer non-custodial wallet creation, CBDC conversion through orchestration of deposit account updates with on-chain transactions and providing wallet access points for user-to-user transfers on-chain.

Jeremy Boot, Product Strategist, Temenos, said: “Temenos is leading the way in CBDC innovation. By actively innovating and driving commercial bank use cases across multiple different technology stacks, Temenos has proven how its open and flexible banking platform can readily adapt to the digital currency future.”

Temenos worked in collaboration with R3, a global leading provider of distributed ledger technology (DLT) and services to regulated and financial institutions. R3’s Corda – the world’s leading private, permissioned distributed application platform – is being used in a wide number of Central Bank and BIS CBDC projects globally. By leveraging R3’s Digital Currency Accelerator, kickstarting with a simulation in an R3—managed sandbox, Temenos was able to successfully demonstrate a wide range of commercial bank use cases.

Ricardo Correia, Global Head of Digital Currencies, R3, commented: “By leveraging reliable financial networks and introducing decentralized application platforms to issue CBDCs, we can expect a complete transformation of the current global financial system, ushering in a new era of enhanced financial fluidity. Collaborating with innovative companies like Temenos underscores the importance of integrating existing banking systems with cutting-edge technologies, allowing organizations and individuals to conduct cross-border transactions at the same pace as sending an email, and instantly settle payments across the entire global payment infrastructure.”

In the second project, Temenos used Hyperledger Besu, a leading opensource Ethereum client, run as a multi-node private, permissioned network, combined with a modified version of the Norgesbank CBDC sandbox, published by the Norwegian central bank. The sandbox provided a CBDC smart contract token definition based on the ERC-20 standard and web UI. By deploying the smart contract, Temenos was able to simulate central bank use cases, across token minting and on-chain transfers.

Central banks globally are progressing with their CBDC strategies. Commercial banks are expected to play key roles in these emerging systems as distributors of CBDC, handling customer KYC, wallet opening, and providing on-off ramps to deposit accounts. These new networks are expected to become intrinsic parts of countries’ financial systems and commercial banks will need to integrate to them and provide associated services to their customer base.