21 Jul 2020 Jane Whitmoore
Banque De France Enters CBDC Sector And Collects Trial-Run Applications
Europe has been falling behind Asia in terms of central bank-issued digital currencies. However, with the recent COVID-19 virus outbreak putting immense stress on central banks, the need for a faster and transparent way to transfer funds has come to life.
Banque de France is among the first central banks in the EU to explore the possible benefits offered by CBDCs and blockchain technology, and to identify exact use cases of integrating Central Bank Digital Currencies in innovative products and services for the clearing and settlement of digital financial assets.
France’s central bank picked eight participants, which filed their documents in response to the call for applications for experiments in interbank settlements. The list includes Accenture, Euroclear, HSBC, Iznes, LiquidShare. ProsperUS, SEBA Bank, and Société Générale.
According to Banque de France, the CBDC experimentation program would show how the "traditional" interbank settlement process could be carried out using a CBDC-based platform, operating on different technologies. Also, France’s central bank is set to identify the benefits of CBDC usage for the current ecosystem of market and payment infrastructures (including productivity gains) and understand how CBDCs could foster financial innovation, as well as analyze what the effects of introducing a CBDC would be on financial stability, monetary policy, and the regulatory environment.
Moreover, Banque de France’s efforts would be part of a larger CBDC exploration trial tests, which would affect the entire Eurozone ecosystem.
“Indeed, any decision to create a CBDC is a matter for the Eurosystem. Consequently, the Banque de France does not intend to perpetuate or conduct such experiments on a widespread basis.”, Banque de France's fact sheet about the CBDC experiment states.
Banque of France also considers that such an experiment will boost the exploration of new methods of exchanging financial instruments against central bank-issued money. Also, by implementing a CBDC experimentation, France’s national bank would test regulatory compliance for CBDCs and improve legislations for CBDC-based interbank and cross-border payments.
After the candidates were approved, Banque de France prepared to “start to collaborate with each of the eight candidates to carry out the pilot projects over the coming months.”Blockchain Blockchain Development Blockchain Application money central banks bank france Regulation Blockchain News Europe Banks HSBC Payments Regulations Legislation CBDC Blockchain technology Coronavirus