Bank of France completes CBDC pilot worth €2 million

The Bank of France successfully tested a central bank digital currency (CBDC) in a pilot project involving the issuance of tokenised shares of a currency fund worth more than €2 million. The regulator used a private blockchain platform for this for the first time, according to the press release.

The project began on 17 December. As part of the experiment, investors bought and sold units of the currency fund on the blockchain of the British company SETL. Settlements were conducted in the digital currency issued using distributed ledger technology.

The experiment required the central bank to develop and deploy smart contracts that govern the issuance and custody of the CBDC, as well as facilitate the transfer of the digital currency in parallel with the delivery of tokenised shares into the investor’s portfolio.

The pilot included the insurance group Groupama, the financial conglomerate Citigroup, the bank Caceis, asset manager OFI AM, the blockchain project IZNES, and IT company DXC.

“This experiment represents a significant step forward in assessing the levers that a central bank digital currency provides to improve the efficiency and resilience of settlement of financial assets on the blockchain, thereby contributing to the smooth functioning of the real economy,” said the central bank in a statement.

Earlier, 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 official clarified that eight pilot projects will be. In his view, experiments with the digital currency will lead to a revision of the regulatory framework.

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