French Financial Institutions Joins Trial For Settling Treasury Bonds Using CBDC

A consortium of 500 French financial institutions has participated in a Central Bank Digital Currency CBDC for tokenized treasury bonds
A consortium of 500 French financial institutions has participated in a Central Bank Digital Currency CBDC for tokenized treasury bonds

A consortium of 500 French financial institutions has participated in a Central Bank Digital Currency (CBDC) for tokenized government treasury bonds. The consortium was led by Euroclear, and participating banks include, but not limited to Agence France Trésor, BNP Paribas CIB, Crédit Agricole CIB, HSBC, and Societe Generale.

The CBDC-backed trial for the securities was commissioned by Banque de France, and it involves the use of a platform that was designed by IBM. As reported by Finextra, the trial borders around the broad spectrum of securities settlement operations including securities issuance, primary market and secondary market trades, liquidity optimization mechanisms like repo, and interest payments. 

The trial was a major part of the efforts by the French Central Bank to test the possible ease of integrating a Central Bank Digital Currency in major mainstream financial transactions. In the course of the CBDC-Bond trial, 500 unique instructions in both primary and secondary markets were executed.

“Together, we have been able to measure the degree to which the issuance of CBDC can offer fast and secure settlement of tokenised securities. We are well aware that there are still challenges that need to be overcome before we can envisage the implementation of blockchain platforms in production as we continue to investigate all routes to drive efficiencies for our clients,” said Isabelle Delorme, deputy CEO of ESES CSDs Euroclear. 

French CBDC Trials: Strengthening Blockchain Use Cases

The use cases of blockchain innovations are all but expanding, with the reported tokenization trial involving the French CBDC coming off as a viable attestation. 

Mainstream tech players have been exploring numerous efforts to create similar consortiums in order to expand the utilities and capabilities of blockchain technology, and their inherent innovations. One of such consortiums as reported by TheCoinRise is the Enterprise Ethereum Alliance (EEA) that counts Microsoft and Intel as its members. The consortium is charged with creating standards for businesses to build applications using the ethereum token and ethereum blockchain.

Digital currency adoption is gaining ground in France with more than 25,000 retailers reportedly accepting Bitcoin as a means of payment. Should there be an eventual rollout of a CBDC by the Banque de France, its adoption may come with relatively less hassle.