French National Bank Experiments With CBDC

French National Bank Experiments With CBDC

June 22, 2021 at 02:45AM

The Banque de France has been working on a central bank digital currency (CBDC) experiment, a press release said Monday (June 21).

“This experiment made it possible to demonstrate the possibilities of interaction between conventional and distributed infrastructures. It also paves the way for other alliances in order to benefit from the opportunities offered by financial assets in a blockchain environment,” said Nathalie Aufauvre, general director of Financial Stability and Operations, per the release.

The experiment was conducted in partnership with SEBA Bank and involved using the CBDC to simulate settling listed securities. That was meant to trigger their delivery in TARGET2-Securities (T2S) in a test environment.

Banque de France simulated the new coin in a public blockchain through keeping control and confidentiality of transactions. This was done via developing and deploying a smart contract.

The operations were also done with partnership from T2S, and the other programs will remain in effect until the middle of this year.

Lessons learned from this experiment will be “an important part of the Banque de France’s contribution to the Eurosystem’s more global reflection on the benefits of CBDC,” the release noted.

PYMNTS wrote about the finishing of a previous Banque de France trial in January, saying that project involved settling on a private blockchain.

The Banque de France has recently said it plans to collaborate with the national bank of Switzerland on a CBDC-related project as well, with the intention of looking into cross-border settlement. It’s called Project Juna and will have to do with “the exchange of the financial instrument against a euro wholesale through a delivery versus payment settlement mechanism and the exchange of a euro wholesale CBDC against a Swiss franc wholesale CBDC through a payment versus payment settlement mechanism.”

While the project is going on, the two banks also said it wasn’t meant to promise any kind of wholesale CBDC issuance.