The Bank for International Settlements (BIS), along with the central banks of Hong Kong and Israel, has unveiled the results of Project Sela, a public-private partnership that explored the creation of a retail central bank digital currency (rCBDC). This project aimed to combine the advantages of physical cash with the benefits of digitalization. It leveraged the expertise of central banks and private participants, including fintechs FIS and M10 Networks, Clifford Chance for legal analysis, and Check Point Software Technologies for cybersecurity. The Sela ecosystem features instantaneous settlement, accessibility for financial institutions, and reduced regulatory requirements for access enablers.



The Bank for International Settlements (BIS), in collaboration with the central banks of Hong Kong and Israel, has unveiled the findings of Project Sela, a pioneering effort to explore the development of a retail central bank digital currency (rCBDC). This collaborative project aimed to harness the best qualities of physical cash while embracing the advantages of digitalization. Here are the key highlights from Project Sela:


Public-Private Partnership:

Project Sela was a public-private partnership that brought together central banks and private entities to collaborate on the creation of a retail CBDC.

Private participants included fintech companies FIS and M10 Networks, legal experts from Clifford Chance, and cybersecurity specialists from Check Point Software Technologies.


Policy, Security, Technology, and Legal Features:

The project drew upon the diverse experience and expertise of central banks to incorporate predefined policy, security, technology, and legal features into the rCBDC ecosystem.

It served as a proof-of-concept to explore the feasibility and potential benefits of such a system.


Sela Ecosystem:

  • In the Sela ecosystem, the central bank issuing the rCBDC maintains the ledger, which features pseudo-anonymous end-user accounts and real-time gross settlement (RTGS) for instantaneous settlement.

  • Funding institutions are responsible for managing user accounts and facilitating the conversion of rCBDC into bank deposits or physical cash.

  • An intermediary known as an "access enabler" handles customer-facing services, including Know Your Customer (KYC) compliance, endorsements, and routing.

  • End users retain control over their electronic wallets through cryptographic keys.


Accessibility and Competition:

  • The Sela ecosystem is designed to be accessible to private financial institutions, encouraging competition and expanding user access to rCBDC services. 

  • Access enablers do not create accounts, manage records, or control funds, resulting in reduced regulatory requirements.


Payment Settlement and User Control:

  • Payments within the Sela ecosystem are settled by central banks, ensuring the security and integrity of transactions. 

  • Users maintain control over their funds throughout the process, enhancing transparency and trust.


Disintermediation and System Weak Points:

  • Project Sela does not lead to disintermediation, as financial institutions remain integral to the process. 

  • RTGS systems, while effective for large settlements, pose challenges for frequent small transactions. The report discusses potential technical solutions.


Project Sela represents a significant step in exploring the potential of rCBDCs and their role in enhancing financial ecosystems. It highlights the importance of collaboration between central banks and the private sector to drive innovation in the digital currency space.


(DEREK ANDERSEN, CoinTelegraph, 2023)