Banque de France is testing the blockchain for the central bank’s digital currency
On May 14th the Bank of France conducted a first test with the Societe Generale Forge developed on a blockchain in-house. This test is part of an approach to experimentation Wholesale central bank digital money (CDBC).
The Banque de France is experimenting In the area of the central bank, digital money (CDBC) has taken a new step. A first test was therefore carried out in collaboration with a bank player, Societe Generale Forge.
The BdF indicates that it has been successfully completed ” a test on May 14th. The central bank therefore relied on a private blockchain developed by its teams. This blockchain is therefore used specifically for the use of a digital central bank currency
Great interest in the banking industry for a wholesale CDBC
The experiment conducted in May was “to regulate the issuance of digital financial instruments by Société Générale Forge,” said the Banque de France. Further tests will follow in the coming weeks.
The BdF is indeed announcing future experiments “in cooperation with other actors”. These life-size tests follow the call for applications opened on March 27, 2020 to “test the use of a digital central bank euro in interbank regulations.” “
The central bank only emphasizes work a “big” CDBC. It differs from a digital retail currency that is also accessible to individuals.
A CDBC for retail is also being investigated within the ECB, Yves Mersch, a member of the central bank’s executive board, recently recalled. “A retail CBDC that is accessible to everyone would change the game. For this reason, we are now focusing on a digital central bank currency for retail customers, “he said.
Central bank money is nothing magical
The priority in France is therefore the valuation of a digital wholesale currency. The Banque de France considers the interest of the banking and finance industry to be important for these experiments. “”
She also insists on the “dynamism of the Place de Paris in terms of technological innovations in the financial sector”. In another blog post, however, the Board of Directors wants to offset expectations of the central bank currency.
“Central bank money nothing magical “It is making headlines. The bank is therefore reminding that the currency, digitally or not, does not allow public debt issuance or the existing debt to be cleared.” Financing budget deficits will not escape an easy option, “economists warn.