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- France Begins Second Stage of CBDC Experiments - Eyes Set for 2023 Launch
France Begins Second Stage of CBDC Experiments - Eyes Set for 2023 Launch
The Banque de France 🇫🇷, one of the most influential central banks in Europe, has announced that it plans to create a wholesale digital asset by 2023. This news comes as no surprise given the recent interest and support for CBDCs by Central Banks🏦 across the world.🌐
The French Central Bank Involvement in CBDC Experiments
According to the Governor of the Banque de France, François Villeroy de Galhau, the French central bank🏦 wants a functioning wholesale central bank digital currency (CBDC) available to use as early as 2023. Tuesday saw Galhau announce that the bank had begun the second stage of its experimentation of a wholesale CBDC, which could be used to speed up domestic and international banking operations.🚀
Over the past year, the French central bank has collaborated with the private sector👨💼 to conduct nine experiments that have demonstrated how a CBDC can be used for wholesale payments, such as cross-border and cross-currency payments🤝 and securities settlements. In addition, the bank has created its DLT technology👨💻 and an automated market maker platform that draws inspiration from the DeFi markets. These developments could form the framework for a multi-CBDC platform that brings together various central banks to enable quick, automated, and transparent currency settlement.
How Does a Wholesale CBDC Operate?
Galhau stated at the 2022 Paris Europlace International Financial Forum (IFF), 🇫🇷
"We want to get closer to a viable prototype, testing it in practice with more private actors and more foreign central banks in the second half of 2022 and in 2023. This work ensures that we stand ready to bring central bank money as a settlement asset as early as 2023."
It's crucial to note that the announcement included the word "wholesale" a few times. In contrast to a conventional retail CBDC, a wholesale CBDC is only used by financial organisations to trade fiat currencies. It does not entail use by the general public as a means of payment for goods and services. So far, it has only been progressing in the direction of an institutional CBDC. But according to The Central Bank, they are also considering a retail CBDC in the future. The governor also stated that retail CBDCs would be established with the aid of commercial banks. He added,
"The Eurosystem should entrust banks with the distribution of digital euros to final users while setting technical, functional and commercial rules – for example, the branding, logo and fee structure."
Why are CBDCs Gaining Massive Attention?
Decentralised digital assets are becoming less and less popular among policy-makers 👨⚖️and governments; thus, central banks are putting more effort into creating their digital currency💲. Wholesale CBDCs, which are based on distributed ledger technology (DLT) and will facilitate interbank settlements, are increasingly being explored by Central Banks.
Wrap Up- France keeps leading Blockchain Charge
France has been heavily investing in blockchain technology innovation 🧑💻and seems to be the most advanced European country🇪🇺 in terms of digital state currency design. Additionally, the French Central Bank has developed a brand-new, proprietary DLT technology and is on the path to achieving its wholesale CBDC goal✅ for 2023. It will also be interesting to see how CBDCs will influence the potential of the current digital currencies in the continent.
- The French Central Bank Governor, François Villeroy de Galhau, announces the second stage of wholesale central bank digital currency (CBDC) experiments. 🇫🇷💶
- The operational wholesale CBDC should be available by 2023, according to the French Central Bank, Banque de France.🏦
- The wholesale CBDC could be applied to simplify domestic and international banking transactions.
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