France Trials CBDC, Blockchain for Government Bond Deals

The experiment is one of the EU’s largest to date, with nearly 500 transactions executed during trial.

AccessTimeIconOct 19, 2021 at 5:26 a.m. UTC
Updated May 11, 2023 at 4:54 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

France’s central bank has executed a series of bond transactions leveraging blockchain using its own digital currency as part of a 10-month pilot.

The Banque de France, along with a group of France’s largest financial market participants, executed the transactions using a system developed by U.S.-based IBM, according to a statement from securities depository Euroclear.

Nearly 500 instructions in both primary and secondary markets were executed, though the value of the transactions was not disclosed in a report published on Euroclear’s website.

BNP Paribas, Crédit Agricole CIB, HSBC and Societe Generale made up the consortium.

Led by Euroclear, the pilot also included large French banks as well as the French public debt office, per the report.

The CBDC trial, reported earlier by the Financial Times, is one of the European Union’s largest to date, with France regarded as one of the highest-profile eurozone members to launch such an experiment. Sweden, whose Riksbank is also toying with digitizing its national currency, uses the e-krona.

Earlier this year, the Banque de France published a request for proposals for central bank digital currency (CBDC) “experiment” applications in a bid to help it understand the risks and mechanisms of CBDCs. The bank has also engaged in a number of experiments using a CBDC for the wholesale market and cross-border payments as well as interbank settlements.

China is currently the largest economy leading the charge with the implementation of a CBDC for use within its domestic market and plans to extend its CBDC trials to foreigners visiting the nation during next year’s Winter Olympics, to be held in Beijing.

And while the EU and the U.S. are yet to develop to advanced stages, the threat of private cryptocurrencies, including stablecoins pegged to fiat currencies, has prompted a number of nations to pursue CBDCs.

“This project went well beyond previous blockchain initiatives because it successfully tested most central securities depository and central bank processes whilst eliminating current interim steps, such as reconciliation between market intermediaries,” said Soren Mortensen, global director of financial markets at IBM, as cited in the report. “We are rapidly moving towards fundamental change in the post-trade market infrastructure.”

UPDATE (OCT. 19, 9:16 UTC): Changes sourcing to Euroclear, adds link to report.



Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Sebastian Sinclair

Sebastian Sinclair is a CoinDesk news reporter based in Australia.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.