The Bank of France announced the successful completion of testing a central bank digital currency (CBDC) for interbank settlements using the Iznes platform based on the blockchain.
According to the Bank of France, as part of a pilot project to test the central bank digital currency (CBDC), from March to December 2020, transactions totaling about 2 million euros were made.
Payments were made in digital currency using the Iznes platform developed by the British startup SETL.Insurance group Groupama, financial giant Citigroup, French bank CACEIS, Asset manager OFI AM, and IT company DXC also took part in the testing.
The experiment was aimed at developing and implementing smart contracts that allow the Bank of France to issue digital currency, control its circulation, and conduct settlements between financial organizations.
The Central Bank believes that blockchain will increase the efficiency of international payments and improve the functioning of the economy in Europe. The Bank of France also said that it will continue to conduct additional experiments under this project until mid-2021.
The regulators need to understand how the central bank digital currency (CBDC) can improve the conduct of cross-border payments and become accessible to institutional clients. Also, such experiments allow to understand what changes should be made to the monetary legislation.
Recall that in May 2020, the Central Bank of France, along with the bank Societe Generale, successfully tested the Digital Euro to understand the mechanisms of its operation and identify potential risks.
Earlier, Bank of France Chairman, Francois Villeroy de Galhau, said that stable coins can seriously affect the financial sovereignty of the European Union, so central banks should accelerate the development of state-owned digital currencies.