Bank of France completes €2 million pilot project with CBDC

Le Banque de France has successfully tested the central bank’s digital currency (CBDC) in a pilot project with the placement of over €2m worth of tokenised shares in the currency fund. The regulator used a private blockchain platform for this for the first time, according to a press release.

The project was launched on 17 December. As part of the experiment, investors Bitcoin Era bought and sold units of the currency fund on the blockchain of UK company SETL. The settlement took place in digital currency issued using DLT technology.

The experiment required the central bank to develop and implement smart contracts that ensured CBDC issuance and control, as well as the transfer of digital currency at the same time as the delivery of tokenised shares into the investor’s portfolio.

Insurance group Groupama, financial conglomerate Citigroup, bank Caceis, asset manager OFI AM, blockchain project IZNES and IT company DXC participated in the pilot.

„This experiment represents significant progress in assessing the leverage that a central bank’s digital currency provides to improve the efficiency and sustainability of financial asset settlement in the blockchain environment and thereby contribute to the successful functioning of the real economy,“ the Central Bank said in a statement.

As a reminder, the Bank of France began testing CBDC in March 2020. In May, the regulator reported successful tests of the digital currency for interbank payments.

In December, a Central Bank spokesman specified that there would be eight pilots. In his view, experiments with digital currency will lead to a revision of the regulatory framework.