Banque de France (the French central bank) has announced the successful testing of its central bank digital currency (CBDC) in collaboration with multiple financial and tech groups.
The experiment was considered to be successful on December 17th of 2020 but wasn’t announced until January 19th of this year via a press release. It was completed in collaboration with IZNES, SETL, CACEIS, CITIGROUP, GROUPAMA AM, OFI AM, and DXC.
Conducted by Banque de France and its collaborators, the experiment consisted of the subscription and redemption of money market funds using blockchain technology provided by SETL, with over 2 million euros being transacted during the experiment (PDF).
Banque de France Shows Interest in Digital Currency Rising
The bank opened applications for CBDC experimentation back in March of 2020 intending to explore the potential offered by the technology, as well as identifying concrete cases in which CBDC could be integrated into innovative procedures.
Multiple countries in the European Union have been vocal about their interest in developing a digital Euro, with other countries like Italy and the Netherlands taking steps in proposing legislation and experimenting with blockchain technology in collaboration with local banks.
A Successful Experiment
SETL, in collaboration with the BDF and IZNES technology teams, provided the distributed ledger technology (DLT) and the underlying infrastructure for the issuance and redemption of the CBDC tokens.
The central bank then issued CBDC tokens on the private blockchain to simulate cash settlements by developing and deploying smart contracts. The bank was able to issue and control the circulation of the tokens throughout the simulation process.
On the other hand, CITI and CACEIS collaborated by purchasing CBDS tokens as participating commercial banks, which allowed the experimenters to replicate possible real-life scenarios and workflows.
While this experiment was a success, other experiments will be running until…