The Central Bank of France-Banque de France and major investment bank Societe Generale have successfully tested blockchain-based central bank digital currency(CBDC) the first time in France.

Societe Generale SFH issued €40 million (approx. $ 44 million) of covered bonds and settled them instantly using the digital euros with delivery versus payment (DvP) to carry out the transaction.

As per the announcement, the Central bank used its in-house developed blockchain to run the CBDC transaction. The bank also indicated that it is focusing more on wholesale uses cases than retail uses for the digital euro. 

The official statement from the Banque de France quotes:

“Since the start of the year, the Banque de France has embarked on an experimental approach to central bank digital currency, aimed at exploring with partners the potential contributions of new technologies to improve the functioning of the financial markets and more particularly interbank regulations (So-called “wholesale” central bank digital currency).”

“The results of these experiments will be an important element of the Banque de France's contribution to the more global reflection led by the Eurosystem on the interest of [a CBDC],” said the central bank.

The statement from Societe Generale expounds:

“This experimentation was performed end to end using blockchain infrastructure. It demonstrates the feasibility of financial securities being digitally settled and delivered in Central Bank Digital Currency (CBDC) for interbank settlements.”   

In 2018, the Societe Generale bank had issues bonds worth €100 million (Approx. $110 million) as security tokens, but that transaction was settled in a traditional euros.

The Societe Generale bank clarified that the latest transaction conducted in digital euro is a new stride achieved by the bank using the innovative technologies aiming to serve the clients in a better way.

The Central Bank further confirmed that in the coming weeks, they will run more tests of the technology.

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Jayashree Ingle

CBW - External Analyst

INDIA