Hong Kong and Israel Successfully Complete Retail CBDC Test


The Bank for International Settlements (BIS) has disclosed the results of Project Sela, a collaborative initiative between central banks, fintech firms, and legal and cybersecurity experts. This project aimed to develop a retail central bank digital currency (rCBDC) with a focus on combining the advantages of physical cash with the benefits of digitalization. Central banks of Hong Kong and Israel actively participated in this endeavor, which leveraged private intermediaries to facilitate the development and testing of the rCBDC concept.

Project Sela Partners and Components

Project Sela enlisted the expertise of several participants, including fintech firms FIS and M10 Networks, legal analysts from Clifford Chance, and cybersecurity specialists from Check Point Software Technologies. Together, they collaborated on this proof-of-concept project, integrating predefined policy, security, technology, and legal characteristics.

The key components of the project included:
Issuing Central Bank: Responsible for maintaining the ledger for the rCBDC and creating pseudo-anonymous end-user accounts within the Sela ecosystem, enabling real-time gross settlement (RTGS) for instant transactions.

Funding Institutions:
Managed user accounts and facilitated conversions between rCBDC, bank deposits, and physical cash.

Access Enablers:
Intermediaries responsible for customer-facing services, including Know Your Customer (KYC) compliance, endorsements, and routing.

End Users:
Maintain control over their electronic wallets through cryptographic keys.

Benefits and Challenges of the Ecosystem

The research findings highlighted several advantages of the rCBDC ecosystem, including increased competition and the potential to combine the best features of cash and digital transactions. However, it also acknowledged certain limitations, particularly related to the availability and suitability of RTGS systems. These systems often do not operate 24/7 and are not optimized for frequent minor transactions. The research discussed potential technical solutions to address these limitations.


The successful completion of Project Sela, involving the collaboration of central banks, fintech firms, legal experts, and cybersecurity specialists, marks a significant step in the development and testing of retail central bank digital currencies. This proof-of-concept project demonstrates the potential benefits of combining the characteristics of physical cash with digital currency, while also highlighting areas for improvement and technical solutions to address existing limitations in the ecosystem.

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