France, one of the leading European economies, has reportedly completed its 10-month trial with the aim of testing how the central bank digital currency interacts with the market.

The project was led by the financial services company Euroclear, which involved some of the country’s largest banks.

France is moving towards a “CBDC”:

Last year, the Banque de France – the country’s central bank – collaborated with the Belgian financial services company Euroclear and several prominent participants in the French financial market.

According to a recent report by the “Financial Times”, the participating parties traded government bonds and settled transactions with “CBDC” issued by the central bank over the course of a 10-month pilot program.

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The new project also tested the utility of this digital token in a range of daily activities such as coupon payments, redemption of deals, issuance of new bonds and their successive employment in repurchase agreements.

Some of the big names in the alliance included Société Générale, BNP Paribas and Crédit Agricole CIB, while the US multinational technology company IBM developed the trial system.

Soren Mortensen, Global Director of IBM, commented:

We are moving quickly towards a fundamental change in the infrastructure of the post-trade market.

This project went beyond previous blockchain initiatives as it successfully tested most centralized and central bank securities deposits while eliminating existing temporary steps, such as settlement between market intermediaries.

Isabelle Delorme, Executive Vice President of Euroclear in France, also expressed her thoughts on preparation and development, saying:

The collaboration between these institutions was successful as they demonstrated that central bank digital currencies can safely settle central bank funds.

Quick change:

The exploration and launch of a central bank digital currency appears to be a surprise move from the Bank of France since Francois Villeroy de Gallo, President of the French Central Bank, recently described this financial instrument as risky and urged strict regulations.

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This summer, he also argued that private cryptocurrencies pose an equal risk to the European Union.

De Gallo also warned that the European Union must act quickly and put in place a regulatory framework around bitcoin and alternative digital currencies.

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He warned that the financial dominance of the union would be jeopardized without taking hasty measures, as he stated in his recent statements:

Whether it’s digital currencies or payments, we in Europe must be prepared to act as quickly as possible, or risk the erosion of our monetary sovereignty.

He stressed that the international performance of the euro is also threatened if the regulatory authorities do not apply regulatory measures.

In his opinion, this move must come into effect in the next year or two or the EU loses momentum.

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