Besides pumping in millions on millions of money into the system to salvage the economy, central banks have had to disinfect likely tainted currency notes because of Coronavirus. Such an inconvenience should make banks even more interested in creating digital currencies. And, the Banque de France completed a test of a blockchain-based digital euro, in its ongoing experiments with a central bank digital currency.
?️[Communiqué] la Banque de France vient de tester le 14 mai avec succès le recours à une #blockchain pour expérimenter l’utilisation d’une monnaie digitale de banque centrale. D’autres expérimentations seront conduites dans les semaines à venir. ? https://t.co/ZtQIi3h4kr #CBDC pic.twitter.com/PZ9FQvWihr
— Banque de France (@banquedefrance) May 20, 2020
Banque de France successfully completes CBDC trials
The central bank of France, Banque de France, completed its test for a central bank digital currency on May 14. For the trial, Banque de France utilized blockchain-developed by the bank’s teams- to settle digital securities with the digital euro.
The announcement read in part:
“Since the start of the year, the Banque de France has embarked on an experimental approach to central bank digital currency, aimed at exploring with partners the potential contributions of new technologies to improve the functioning of the financial markets and more particularly interbank regulations (so-called “wholesale” central bank digital currency).”
The bank will collaborate with other actors to conduct more rigorous tests in the coming weeks. These will also include trials in interbank regulations. The announcement notes that these trials are part of the files that the bank received on March 27 as calls for application.
Countries are rushing to explore the potential uses of CBDCs in their respective jurisdictions. China was arguably the first nation to announce its plans, though the exact design and intended use of the digital yuan are still shrouded in mystery.
According to a survey on CBDC published by Bank for International Settlements last year, 70% of the central banks that participated in the survey are currently, or will soon be engaged in CBDC development work. During the time of the study, one central bank saw itself as very likely to roll out a wholesale digital currency in the next three to six years.
Towards the end of last year, the French central bank governor François Villeroy de Galhau had asserted that he wanted the European nation to be the forerunner of a wholesale central bank digital currency and derive the benefits earmarked for a reference CBDC.
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