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Cryptocurrency : French central bank succeeds in CBDC experiment in issuing a government bond

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The Banque de France or Bank of France, the central bank of France, has prospered by undertaking an experiment on using a central bank digital currency (CBDC) to issue a French government bond.

According to the announcement :

“The experiment consisted of the simulation of an authorized blockchain of government bond issuance (OAT) by Agence France Trésor, followed by several secondary market operations carried out with these bonds.”

Cash settlements were simulated using blockchain-powered CBDC. The Bank of France experimented on the 21st and 24th of this month in collaboration with a group of economic actors led by Euroclear. The program launched in March of last year.

CBDCs are digital assets tied to a real-world asset and backed by central banks, which means that they represent a claim against the bank exactly how banknotes work. Furthermore, they are blockchain-enabled, representing a new technology for issuing central bank money at the wholesale and retail level.

Interoperability between legacy and distributed architectures

Nathalie Aufauvre, general director of financial stability and operations of the Bank of France, said:

“As a new achievement, such as exploring the potential of wholesale CBDC, this experiment allowed for the first time testing of financial optimization on a blockchain with REPO operations, as well as the synchronization of collateral operations between the blockchain and the European platform for the settlement of Target 2 Valores securities. “

He added:

“This provides a very good illustration of interoperability between legacy and distributed architectures.”

The experiment also involved the creation and implementation of smart contracts so that the French central bank could issue and control the circulation of CBDC tokens, causing their simultaneous transfer as a result.

Meanwhile, the Bank for International Settlements (BIS) recently revealed its full support for the development of CBDC by central banks to achieve financial and monetary stability through international cooperation.

Image Source: Shutterstock

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