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The French central bank leveraged the private blockchain platform developed by UK blockchain startup SETL. It also used smart contracts for the issuance and circulation of the CBDC tokens.
On Tuesday, January 19, the Central bank of France released the results of its central bank digital currency (CBDC) pilot testing conducted last month on December 17. The pilot testing involved 2 million euros worth of shares settled on a private blockchain network provided by UK blockchain startup SETL.
SETL also facilitated the CBDC stablecoin as the Central bank of France used IZNES for the subscription and redemption of fund units. Besides, the central bank also used smart contracts to issue and control the circulation of Digital Euro tokens.
The first settlements of funds through CBDC involved participation from different financial institutions. This included big names like Citi, Groupama AM, CACEIS, OFI AM, and DXC.
The Bank of France said that it will be conducting more such trials throughout this year of 2021. It added that this process will be important for the research of the interest around the CBDC. Looking at the nature of experiments, the primary use case for CBDC will be trading transactions or capital markets. This is because a blockchain-based CBDC will facilitate instant settlement. The official statement from the Bank of France reads:
“This experiment constitutes a significant advance in the evaluation of the levers that a central bank digital currency provides for strengthening the efficiency and resilience of the settlement of financial assets in a blockchain environment , and thus contribute to the proper functioning of the real economy. The other experiments of the program are underway until mid-2021 and all the lessons will be an important element of the Banque de France’s contribution to the more global reflection of the Eurosystem on the interest of an MNBC”.
Central Banks of France and Other Countries Accelerating CBDC Projects
Central banks across Europe and the world have been accelerating their CBDC developments in recent times. Francois Villeroy de Galhau, governor of the Bank of France said last year that a public-private partnership would be the best way to issue a CBDC to retail users.
Besides, the French central bank is also providing necessary inputs for the European Central Bank’s (ECB) Digital Euro explorations. However, the finance ministers of France and Germany have opposed the entry giants like Facebook in Europe’s digital currency space.
On the other hand, China is leading the development of CBDC among the top world economies. The Asian economic giant has conducted several pilot tests over the last few months. Many analysts say that China’s CBDC – Digital Yuan – could be the first to be rolled out officially in the market.
During a recent interview with Yahoo Finance, Fed chairman Jerome Powell said that the creation of a CBDC shall be on high priority this year. Powell also called it essential to combat “bad private-sector money”.