As a number of global jurisdictions similar the Bahamas and Sweden are already testing their central banking concern digital currencies (CBDC), French key bank is getting more straightforward regarding its own CBDC plans.

The Bank of France is at present officially launching a programme of experiments to exam the integration of a CBDC for interbank settlements, inviting potential participants to submit their applications.

Bank of France doesn't insist on blockchain implementation for CBDC

According to a March 30 certificate, French republic's central bank is calling for applications to experiment with the use of a digital euro, aiming to explore the potential CBDC opportunities for clearing and settlement of tokenized financial avails. Although the Bank of French republic previously chosen for blockchain-based settlement systems in Europe, the bank said that it doesn't impose whatever specific technology inside its newly announced CBDC experiment programme.

Every bit such, French cardinal depository financial institution will select a maximum of 10 CBDC-related applications past groups or individuals, establishing "innovative nature" equally a major pick criterion. According to a detailed document calling for applications, applications must be submitted by European Matrimony-based applicants or in a state party to the European Economic Area agreement. Applicants tin submit until May 15, 2022, while selection of applications will take place on July ten, the bank announced.

Three use cases to be explored

The bank'south CBDC experiment has three objectives such as modeling equally CBDC-based interbank settlement and identifying benefits and analyzing the potential risks. Amid three potential CBDC use cases, the Depository financial institution of France outlines payment against financial instruments, payment confronting other central banks' digital currency and payment against digital assets.

The banking concern emphasized that it will not engage in money cosmos within its CBDC experiment. Additionally, the cardinal bank noted that it will be destroying the token reflecting the amount in euros in digital form at the cease of the accounting day on which payment was made.

The Bank of France as well highlighted that information technology doesn't plan to apply any project on a wider scale, stating:

"These experiments will act equally a contribution past the Banque de French republic to a broader give-and-take within the Eurosystem, which volition make any decision on whether to fix up a CBDC. The tests are not intended to be continued on a long-term footing or practical on a wide calibration by the Banque de France itself."

Bank of France purportedly wanted to launch a CBDC past Q2 2022

The new CBDC project from the cardinal bank of France plainly marks the outset time when the bank talked about CBDC since December 2022. On Dec. 4, the banking company'due south governor François Villeroy de Galhau reportedly announced that the bank will start testing the digital euro project past the end of the first quarter 2022. Previously, Denis Beau, the starting time deputy governor of Banque de France pointed out that blockchain technology could facilitate a number of financial and payment processes including cross-currency settlement.

In early March, France's markets regulator, the Autorité des Marchés Financiers, proposed a regulatory sandbox to experiment and explore potential benefits of security tokens within the European Marriage.