Central Bank of France to test Central Bank Digital Currency

The Central Bank of France recently published a request for proposal to help assist the bank in studying the usage of Central Bank Digital Currencies (CBDCs). The bank is launching an experimental program to specifically assess the functionality of the digital euro in settling transactions. The program aims to accomplish three primary goals: 1) determine the benefits of integrating a CBDC with the Euro, assess the functionality of a CBDC with interbank settlement, and identify how a CBDC impacts monetary policy.

In a statement, the central bank of France said, “The aim is to explore the potentialities offered by this technology, and to identify concrete cases integrating Central Bank Digital Currencies in innovative procedures for the clearing and settlement of tokenized financial assets.”

 

To conduct these tests, the central bank of France is seeking applicants. The deadline for application is May 15, while the month of June is reserved for interviews and those selected will be notified by July 10. 

In order to qualify, applicants must operate within the European Union or the European Economic Area. Applications must include proposals which target one of the following use cases:

 

delivery-versus-payment: payment in central bank money against delivery of listed or unlisted financial instruments

payment-versus-payment: payment in central bank money against the digital currency of another central bank

payment in central bank money against digital assets

The central bank clarified that no money will be created as a result of these experiments. According to the statement, “The Banque de France will not engage in money creation in the context of these experiments. The token reflecting the amount in euros in digital form will be destroyed at the end of the accounting day on which payment was made.”