France’s Central Bank Successfully Test Blockchain Based Digital Euro

France’s Central Bank Successfully Test Blockchain Based Digital Euro

Blockchain
May 22, 2020 Editor's Desk
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The central bank of France has “fortunately” finished the first test of its blockchain-based digital currency. Declaring the news on Wednesday, the Banque de France stated it ran the experiment with investment banking giant Societe Generale, which published bonds as security tokens and then resolved them in digital euros. Societe Generale issued €40 million (~$44
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The central bank of France has “fortunately” finished the first test of its blockchain-based digital currency. Declaring the news on Wednesday, the Banque de France stated it ran the experiment with investment banking giant Societe Generale, which published bonds as security tokens and then resolved them in digital euros.

Societe Generale issued €40 million (~$44 million) worth of covered bonds as security tokens on May 14, which were then settled in the central bank’s blockchain-based digital euros.

“This experimentation was performed end-to-end using blockchain infrastructures…It demonstrates the feasibility of financial securities being digitally settled and delivered in Central Bank Digital Currency (CBDC) for interbank settlements,” explained Societe Generale.

In April 2018, the investment bank published bonds worth €100 million (~$110 million) as security tokens, though those were settled in traditional euros. The most advanced test transaction, conducted in digital euro, “is a new step in Societe Generale scaling up in its transformation, using the most innovative technologies, with the aim of better serving its clients,” stated the investment bank.

France’s central bank stated it will now handle more tests with other players “in the next few weeks” as part of its continuous experiments with digital euro.

“The results of these experiments will be an important element of the Banque de France’s contribution to the more global reflection led by the Eurosystem on the interest of [a CBDC],” stated the central bank.

Banque de France launched its digital euro experimental program in April. At the time, the central bank stated it intends to examine the potential of digital currency in “clearing and settlement of tokenized financial assets.”

Restating this point on Wednesday, the central bank stated it is concentrated on “wholesale” CBDC uses cases. In April, the central bank stated it is not seeing to replace coins and banknotes.

The European Central Bank also once stated that it is prepared to issue its digital currency if the private sector declines to make cross-border payments quicker and cheaper. 

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