France’s central bank, the Banque de France on May 20, 2020, announced that it had successfully completed a trial test of the digital euro based on blockchain technology. Notably, the central bank digital currency (CBDC) test conducted by Banque de France was executed with major French multinational investment bank Societe Generale (SocGen).
French Central Bank Trials Digital Euro
The race for launching a successful CBDC continues to heat up.
According to a recent development, Banque de France and SocGen have tested the use of a distributed ledger technology (DLT) platform to settle a transaction with a CBDC – in this instance, it being digital euro. Per sources close to the matter, earlier this month, SocGen issued 40 million worth of covered bonds as security tokens directly registered on a public blockchain network.
These covered bonds were fully subscribed by SocGen which subsequently paid the issuer in digital euros issued by Banque de France.
The French central bank says the SocGen transaction is just the first of many more transactions it plans to carry out with other financial institutions to test the viability and feasibility of a CBDC.
The encouraging results from the trial were enough to warrant a positive sentiment from SocGen which stated the digital euro experiment is a testimony to the myriad benefits of digitized financial securities in the interbank transaction space.
Central Banks Determined to Outrun Each Other in CBDC Race
Ever since the idea of a CBDC first came into limelight, central banks across the world have ramped up their efforts to explore the potential of blockchain technology in issuing a functional sovereign digital national currency.
The digital euro trial should hardly come as surprising for keen followers of the DLT space. BTCManager reported in December last year that the European Central Bank (ECB) was mulling launching a digital euro if the private sector fails to guarantee a convenient changeover for cross-border payments.
On a more recent note, decentralized peer-to-peer blockchain payments network Stellar (XLM) expressed its ambition to become the go-to platform for the issuance of a digital dollar.