During the tests of the state digital currency, it was possible to exclude agreement between market intermediaries. The testing was attended by regulators and local financial institutions.
The central bank of France continues to actively explore the possibilities of the state digital currency (CBDC). In the course of research, the regulator completed the CBDC test in the French lending market.
For ten months, more than 500 financial institutions in France participated in testing the use of the state digital currency for transactions with government bonds and securities. The CBDC test was conducted by the Belgian firm Euroclear using IBM technology. The pilot project involved the French Budget Office, the Central Bank of France and a consortium of large local finance companies including BNP Paribas, Crédit Agricole CIB, HSBC and Société Générale. During the trials, the CBDC was tested in several standard transactions, such as issuing new bonds, using them in repurchase agreements, and paying coupons and redeeming transactions.
Isabelle Delorme, CEO of Euroclear, announced the successful testing of the state digital currency in the lending market.
“We were able to appreciate the inherent benefits of this technology and concluded that government digital currencies can safely and reliably settle central bank funds.”
According to Soren Mortensen, Head of International Financial Markets at IBM, the testing has successfully tested most of the processes of the Central Securities Depository and the Central Bank. The participants managed to exclude the agreement between the market intermediaries.
Before testing the CBDC in the government lending market, Banque de France, together with the Swiss cryptocurrency bank SEBA, successfully completed the previous stage of testing settlements for securities transactions using the government digital currency.
CBDC testing has already started in 2020. The central bank began a test sale of securities for state digital currencies, after which it continued testing with several financial institutions, among which was the Societe Generale bank.
As a reminder, not everyone shares the enthusiasm for launching CBDC on the blockchain. According to Carlos Lenz, chief economist at the Swiss National Bank, the decentralized nature of blockchain is not well suited for state-controlled digital currencies.
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