Settle Interbank Payments with wCBDC

Use Cases

About

Use Case Category	Use Case Scope
wCBDC	This use case involves two banks using wholesale CBDC to settle obligations related to interbank money market operations i.e. direct transfer of funds between banks to fulfill obligations that are not related to securities transactions.

Description

Key Stakeholders:

Lender Bank, Borrower Bank

Story:

1. Bank A borrows funds from Bank B in the interbank money market.

2. Loan terms like tenor, interest rate etc. are mutually agreed.

3. On settlement date, Bank A repays the loan amount to Bank B via wholesale CBDC transfer.

4. The repayment amount is instantly settled between the banks.

5. Bank B receives the wholesale CBDC real-time on its books.

6. The interbank money market loan is settled directly without correspondent banks.

Postconditions:

Settlement of interbank money market operations is done securely in real-time using wholesale CBDC transfer between participant banks.

Example

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• Day 1: Bank A borrows $5 million from Bank B for a short-term liquidity need. They agree on a one-week term for the loan.

• Day 8: Bank A needs to repay the $5 million loan to Bank B. Using a wholesale CBDC, Bank A transfers the $5 million to Bank B instantly, settling the loan obligation.