Tag: Banque De France

France & Switzerland Central Banks Succeed Pilot CBDC Trials in Conjunction with BIS

by Blockchain News

The trio of the Central Banks of France, Switzerland, and the Bank of International Settlements (BIS) has successfully conducted a wholesale Central Bank Digital Currency (wCBDC) trial involving both country’s fiat notes.

The BIS revealed the “experiment programme launched by the Banque de France (BdF) in 2020 has been completed”. It also involved third-party technology service providers, including Accenture, Credit Suisse, Natixis, R3, SDX, and UBS.

The trial dubbed project Jura featured the direct transfer of Euro and Swiss Franc wCBDCs between French and Swiss commercial banks on a single DLT platform operated by a third party. The funds were transferred in strict adherence to each country’s extant laws. Project Jura also featured tokenised asset and foreign exchange trades that were settled safely and efficiently using payment versus payment (PvP) and delivery versus payment (DvP) mechanisms.

All the experiments were conducted in a near‑real setting, and it also utilised real‑value transactions, all of which met current regulatory requirements. 

“Jura demonstrates how wholesale CBDC can optimise cross‑currency and cross‑border settlements, which are a key facet of international transactions.” Sylvie Goulard, Deputy Governor, Banque de France.

Despite the dogged race to float government-backed digital money and the success of project Jura, it gives no guarantee that either of the participating countries will be launching digital fiat notes of their respective currencies. Project Jura exposes some important factors that Central Banks looking to design a CBDC must adhere to. Some of these include staying abreast of technological innovations that can be fast-paced in distributed ledger technologies.

“Broadening the use of central bank money through wider access or increased cross‑border settlement could catalyse these changes, as could deeper integration of currencies with other digital assets and securities,” the report concludes.

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France & Switzerland Central Banks Succeed Pilots CBDC Trials in Conjunction with BIS

by Blockchain News

The trio of the Central Banks of France, Switzerland, and the Bank of International Settlements (BIS) has successfully conducted a wholesale Central Bank Digital Currency (wCBDC) trial involving both country’s fiat notes.

The BIS revealed the “experiment programme launched by the Banque de France (BdF) in 2020 has been completed”. It also involved third-party technology service providers, including Accenture, Credit Suisse, Natixis, R3, SDX, and UBS.

The trial dubbed project Jura featured the direct transfer of Euro and Swiss Franc wCBDCs between French and Swiss commercial banks on a single DLT platform operated by a third party. The funds were transferred in strict adherence to each country’s extant laws. Project Jura also featured tokenised asset and foreign exchange trades that were settled safely and efficiently using payment versus payment (PvP) and delivery versus payment (DvP) mechanisms.

All the experiments were conducted in a near‑real setting, and it also utilised real‑value transactions, all of which met current regulatory requirements. 

“Jura demonstrates how wholesale CBDC can optimise cross‑currency and cross‑border settlements, which are a key facet of international transactions.” Sylvie Goulard, Deputy Governor, Banque de France.

Despite the dogged race to float government-backed digital money and the success of project Jura, it gives no guarantee that either of the participating countries will be launching digital fiat notes of their respective currencies. Project Jura exposes some important factors that Central Banks looking to design a CBDC must adhere to. Some of these include staying abreast of technological innovations that can be fast-paced in distributed ledger technologies.

“Broadening the use of central bank money through wider access or increased cross‑border settlement could catalyse these changes, as could deeper integration of currencies with other digital assets and securities,” the report concludes.

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France Central Commission Proceeds CBDC-Backed Treasury Bond Trials

by Blockchain News

Banque de France, the Central Bank of France, commissioned a trial involving the settlement of treasury bonds using Central Bank Digital Currencies (CBDCs) in a blockchain-backed environment.

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Local media reported the trial is conducted by a consortium of 500 financial institutions led by Euroclear, also include counts Agence France Trésor, BNP Paribas CIB, Crédit Agricole CIB, HSBC, and Societe Generale as members.

IBM designed the blockchain environment for testing the Treasury Bonds. The trial features securities issuance, primary and secondary market trades, liquidity optimization mechanisms like repo, and interest payments. Throughout the test, up to 500 instructions cutting across both primary and secondary markets were recorded. Isabelle Delorme, a deputy CEO of ESES CSDs Euroclear, said:

“Together, we have been able to measure the degree to which the issuance of CBDC can offer fast and secure settlement of tokenised securities. We are well aware that there are still challenges that need to be overcome before we can envisage the implementation of blockchain platforms in production as we continue to investigate all routes to drive efficiencies for our clients,” 

As one of the frontline nations in the European Union and a G7 key member, France has been doing all it can to chart a viable course for its embrace of CBDCs, and blockchain technology as a whole. The Euroclear-backed CBDC-Treasury Bond settlement was a part of the Central Bank’s initiative to explore the integrative capabilities of an eventual CBDC on the country’s core financial markets.

Many countries are also testing out the capabilities of their proposed CBDC issuance, in a bid to prepare all necessary environments for the new form of money to integrate easily into existing financial and economic terrain. China is amongst the nations with advanced CBDC trails, as it has conducted small-scale retail transactions for its proposed Digital Renminbi. Other nations with noteworthy CBDC trials include but are not limited to Switzerland and Lithuania.

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French Central Bank Succeeds in CBDC Experiment in the Issuance of a Government Bond

by Blockchain News

The Banque de France or Bank of France, the central bank of France, has prospered in undertaking an experiment on using a central bank digital currency (CBDC) to issue a French government bond.

As per the announcement:

“The experiment consisted in the simulation on a permissioned blockchain of Government bonds’ (OAT) issuance by Agence France Trésor, followed by several secondary market operations performed on these bonds.”

Cash settlements were simulated using the blockchain-powered CBDC. The Bank of France experimented on the 21st and 24th of this month in collaboration with a group of economic players led by Euroclear. The program launched in March last year. 

CBDCs are digital assets pegged to a real-world asset and backed by the central banks, meaning that they represent a claim against the bank exactly how banknotes work. Furthermore, they are blockchain-enabled, representing a new technology for issuing central bank money at the wholesale and retail level. 

The interoperability between legacy and distributed architectures

Nathalie Aufauvre, the general director of financial stability and operations at Bank of France, noted:

“As a new achievement such as to explore wholesale CBDC potential, this experiment allowed testing for the first time financial optimisation on a blockchain with REPO operations, as well as the synchronisation of collateral operations between the blockchain and the European platform for securities settlement Target 2 Securities.”

He added:

 “This provides a very good illustration of interoperability between legacy and distributed architectures.”

The experiment also entailed creating and deploying smart contracts so that the French central bank could issue and control the circulation of CBDC tokens, triggering their simultaneous transfer as a result.

Meanwhile, The Bank for International Settlements (BIS) recently disclosed its full backing for the development of  CBDCs by central banks to pursue financial and monetary stability through international cooperation.

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Bank of France Conducts CBDC Test to Settle Listed Securities

by Blockchain News

The French Central Bank, Banque de France, has completed one of its series of experiments using a central bank digital money (MNBC).

According to the official publication, the experiment targeted settling listed securities and drew SEBA Bank as a partner in the experiment.

Through the experiments, MNBCs were used to simulate the settlement of listed securities and thus trigger their delivery in TARGET2-Securities (T2S). The settlement was based on existing conditional delivery of securities functionality ( T2S Conditional Securities Delivery – CoSD ).

From a technological point of view, the entire experiment to the Bank of France simulates the issuance of MNBC on a public blockchain. This was done to maintain adherence to preserving the control and confidentiality of transactions based on the development and deployment of a dedicated smart contract.

“This experiment has made it possible to demonstrate the possibilities of interactions between conventional infrastructures and distributed infrastructures, and paves the way for other alliances to take advantage of the opportunities offered by financial assets in a blockchain environment,” said Nathalie Aufauvre, Director General of Financial Stability and Operations of the Banque de France.

The pursuit of CBDCs and the associated testing has become commonplace amongst the majority of central banks today. With China taking the lead in developing and testing its Digital Yuan, other major economies, including the United States and Great Britain, are also actively exploring government-backed digital currencies.

Besides SEBA bank, the French Central Bank conducted the latest experiment in line with other partners, including Banque Internationale à Luxembourg and LuxCSD. According to the bank, the discoveries made in these experiments will help the European Central Bank in the broader pursuit of the digital euro. 

As Central Banks accelerate development and research into CBDCs, there are growing expectations that new regulations may be introduced to prevent competition from privately issued stablecoins.

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100M euro digital bond was a CBDC test, says Banque de France

by Cointelegraph

It turns out the 100 million euro digital bond issued by the European Investment Bank earlier this week was actually a trial of a European central bank-issued digital currency, or CBDC.

An April 28 announcement from France’s central bank, Banque de France, revealed the digital bond was settled using a CBDC on a blockchain.

The two year-bond was issued on the Ethereum public blockchain on April 27 and settled the following day, with a maturity date of April 28, 2023. The sale was led by Goldman Sachs, Santander and Société Générale.

“From a technological standpoint, the experiment required the development and deployment of smart contracts under secured conditions, so that the Banque de France could issue and control the circulation of CBDC tokens and so that CBDC transfer occurred simultaneously with the delivery of securities tokens to the investors’ portfolio,” Banque de France said.

The bank also revealed plans for further experiments in the future, noting that its efforts are part a push to provide evidence of use cases for a European CBDC:

“In the coming months and in cooperation with the market, the Banque de France will conduct additional experimentations to assess other uses of central bank digital currency in interbank settlements.”

The news that the EIB had issued the bond on Ethereum pumped the Ether (ETH) price to $2,709 on Wednesday. Danny Kim, head of revenue at crypto broker SFOX told Reuters the announcement “triggered a bullish institutional use case for Ethereum.”

Despite the bullishness on Ethereum, the wait for a digital euro may still take some time, as the European Central Bank did not participate in the pilot.

In January this year, President of the European Central Bank Christine Lagarde said that the development of a digital euro is “going to take a good chunk of time to make sure it’s safe,” adding, “I would hope that it’s no more than five years.”

On April 12, ConsenSys South Africa lead Monica Singer warned that Europe may be left behind if its too slow to pull the trigger:

“If the central bank in Europe is gonna wait until 2028, by then there won’t be a central bank. Because who’s gonna use the euro in its current form? There are gonna be so many choices.”