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Banque de France in the spotlight for its CBDC trial

The central bank of France partnered with SEBA to complete its new CBDC experiment for securities settlement
Banque de France

The central bank of France partnered with SEBA to complete its new CBDC experiment for securities settlement.

Banque de France disclosed the news in a press release published on Monday, June 21. According to the announcement, the latest trial used central bank digital currencies for the simulation of settlement securities. This was achieved by utilizing TARGET-2 Securities (TS2), the European Central Bank engine for instantaneous settlement. Banque de France completed the experiment with the help of SEBA, LuxCSD, and Luxembourg’s oldest private bank, Banque Internationale à Luxembourg.

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“The experiment consisted in using the CBDC to simulate the settlement of listed securities and thus trigger their delivery in TARGET2-Securities (T2S), in test environment, thanks to Conditional Securities Delivery (CoSD) existing feature in T2S. From a technological point of view, Banque de France simulated CBDC issuance on public blockchain, by preserving control and confidentiality of transactions, based on the development and deployment of a dedicated smart contract.”

BANQUE DE FRANCE PRESS RELEASE
CBDC france
Nathalie Aufauvre, Managing Director, Financial Stability and Operations at Banque de France.

The trial was part of an experimental program launched last year in March. Later in July, the central bank of France published the list of eight applicants that would contribute to the project, including Accenture, Euroclear, and HSBC. 

Banque de France also collaborated with the central bank of Switzerland earlier this month. The partnership focuses on bank-to-bank transactions. “Project Jura” represents the first plan where two digital central bank currencies will be tested together.

Private firms like Credit Suisse, R3, SIX Digital Exchange, UBS, and Natixis are also part of the trial. Project Jura will explore cross-border agreements of two wholesale central bank digital currencies and a French digital financial instrument.

Jura will run on a distributed ledger technology platform which will allow transactions to be immediate. Before they go through, transactions will have to be digitally signed and approved by both central banks of Switzerland and France.

This is the last phase of “Project Helvetia” launched by the central bank of Switzerland, which investigated tokenized assets with wholesale CBDCs. Anyhow, Jura is just in an experimental phase, and it doesn’t mean a digital currency will be issued.

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