Bank of France Deputy Governor Denis Beau, speaking Thursday at the Paris Blockchain Summit, discussed the progress being made with the central bank digital currency (CBDC) and touched upon possible regulatory changes and the legal framework.
Earlier this year, the Bank of France published a request for proposals for CBDC “experiment” applications. The project’s aim was to help France’s central bank understand the risks and mechanisms of CBDCs and also contribute to the eurozone’s digital cash conversation.
In May, the bank started working closely with Societe Generale to test out digital transactions, tokenization of securities as well as the settlement of a transaction on the private blockchain.
The bank is currently analyzing whether tokenization can help with cross-border payments, which Beau describes as being "costly, incur long delays before settlement, and give rise to uncertainties" on anti-money laundering checks.
In his remarks, Beau said:
In 2020, the European Central Bank (ECB) has been intensifying its work on the digital euro. Most recently, ECB President Christine Lagarde addressed the competition to dominate payments on a global scale and considerations for a eurozone retail CBDC.
Lagarde says she believes a digital euro would allow the bloc to be at the cutting edge of innovation but warned the lack of payments integration in Europe indicates that foreign providers have taken the lead.