Clifford Chance

Clifford Chance Advises BIS Innovation Hub on Ground-breaking CBDC Implementation Project - Project Sela

Global law firm Clifford Chance is advising the Bank for International Settlements (BIS) Innovation Hub on Project Sela, a pioneering initiative in the realm of central bank digital currency (CBDC) architecture. This collaborative endeavour, conducted jointly with the Bank of Israel and the Hong Kong Monetary Authority, represents a significant leap forward in the exploration of CBDC ecosystems.

Project Sela is focused on the development and evaluation of a two-tier retail CBDC architecture, designed to distribute CBDCs through traditional financial services firms and a new type of payment services provider called an Access Enabler whose key characteristic is that they do not hold client funds at any time.

The central objective of Project Sela is to assess the feasibility of reducing financial exposure for retail CBDC intermediaries, potentially paving the way for a more accessible CBDC system. However, this increased accessibility is accompanied by heightened concerns about cybersecurity. Therefore, Project Sela also aims to enhance cybersecurity measures while expanding system access.

Diego Ballon Ossio, Partner at Clifford Chance, commented: "Project Sela is ground-breaking. Not only is this project providing the blueprint for how retail CBDCs can be sensibly distributed, but it is also proposing a new category of payment services provider. This idea can potentially change the payments landscape of the future! We are immensely proud to have had the opportunity to push boundaries and contribute to this great development."

Project Sela's success underscores the feasibility of creating an CBDC ecosystem that combines accessibility, competition, and robust cybersecurity while retaining the key advantages of physical cash.

The Clifford Chance team was led by Partner Diego Ballon Ossio and Simon Gleeson supported by Anastasia Mikhaleva.