French central bank tests blockchain-based CBDC for the bond market

The French central bank continues to actively research a central bank digital currency (CBDC) and is completing a major trial with a blockchain-based CBDC in the country’s debt market.

More than 500 institutions in France took part in a 10-month experiment testing a CBDC for government bond transactions issued by the Banque de France, the Financial Times reported Tuesday.

The CBDC test was conducted by the Belgian financial services company Euroclear and used a system from the American technology giant IBMThe French National Debt Office also took part in the test, along with the central bank and a consortium of large financial firms operating in France, including companies such as BNP Paribas, Credit Agricole CIB, HSBC and Societe Generale.

French central bank tests blockchain-based CBDC for the bond market
French central bank tests blockchain-based CBDC for the bond market

As part of the exam, Participants traded government bonds and security tokens and processed them through a CBDC provided by the central bankThe project tested use cases for a CBDC in a variety of day-to-day activities, such as issuing new bonds, using them in repurchase agreements, and paying coupons and exchanging agreements.

“Together, we successfully measured the inherent benefits of this technology and concluded that central bank digital currencies can securely process central bank money.”said Isabelle Delorme, an executive at Euroclear.

According to Soren Mortensen, IBM’s Global Director of Financial Markets, the project “went well beyond previous blockchain initiatives” because it successfully tested “most CSD and central bank processes”. while at the same time eliminating existing intermediate steps such as coordination between market brokers.

After starting an experimental CBDC program in March 2020, The French central bank is constantly testing various CBDC use casesIn June, the Banque de France, in cooperation with the Swiss cryptocurrency bank SEBA, tested a CBDC to simulate the settlement and delivery of listed securities. The central bank piloted a CBDC to issue $ 2.4 million worth of bogus stocks through a private blockchain platform.

Similar Posts