The Bank of France completes the first phase of CBDC trial

Time:2021-12-25 Source: 1157 views Trending Copy share

The Bank of France stated that it has completed the first phase of experimentation on the bulk central bank digital currency (CBDC) and plans to enter the next phase, focusing on cross-border payments.

The Bank of France has been exploring the use of CBDC for currency exchange between financial institutions since March 2020.

The final stage of the first batch of experiments included the issuance of digital bonds on the blockchain and settlement with CBDC, which was carried out with many partners, including the banking giant HSBC.

"The experiment successfully tested the end-to-end transaction life cycle of digital assets," Bank of France said on Thursday. "All transactions occur in different blockchain environments, HSBC is responsible for the custody of assets, and the Bank of France is responsible for securities settlement and CBDC."

Central banks around the world are exploring the development of digital currencies, partly to solve the problem of declining cash usage, just as interest in private cryptocurrencies is increasing. However, the exploration of bulk CBDCs is limited to a small group. They try to use CBDCs to solve some of the inefficiency and complexity of the exchange of central bank currency between financial institutions.

Bulk CBDC is a digital currency issued by financial institutions to exchange currencies issued by central banks. It is different from retail CBDC, which is used by the public as a form of digital cash.

Banque de France is also exploring retail CBDCs as part of the broader work of the European Central Bank on the possible development of a digital euro.

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