The central bank of France, Banque de France, tests the first trail of central bank digital currency (CBDC) in collaboration with the investment firm, Societe Generale. It aims to further experiment with the digital euro in different operations by joining new partners like Societe Generale.
Investment Firm Helps in Testing CBDC
The central bank of France started testing digital euro on May 14 with Societe Generale when financial securities were settled in exchange with payment in digital euro instead of fiat currency. Moreover, the trial is operated fully on blockchain infrastructure in a try to replace the traditional method with new technology. Last month, Banque de France announced its pilot program to test state-issued digital currency and asked financial institutions to join the experimentation program. They also clarified that the participation of large institutions can tell about their interest to digitize the finance network.
Focus on Interbank Regulations
In the announcement, the bank does not talk about the consumer-focused digital currency but rather focuses on “interbank regulations”. It means that CBDC is not created for users but for the operations between the banks. However, it may roll out digital euro for citizens’ usage, but the announcement does not mention retail CBDC.
The announcement reads:
“In the next few weeks, other experiments will be conducted by the Banque de France in cooperation with other actors, based on the files received as part of the call for applications opened on March 27, 2020 to test the use of a central bank digital euro in interbank regulations. Their high number testifies to the interest of the banking and financial industry for these experiments and to the dynamism of the Place de Paris in terms of technological innovations in the financial sector.”
China has also recently rolled out the CBDC titled “Digital Currency Electronic Payment” (DCEP) in its pilot program. The central bank of China has selected four pilot cities, including Suzhou, Shenzhen, Chengdu, and Chengdu. Soon, it will available for public use as a state-issued digital currency.