France Launches Digital Currency Program
The French central bank has requested for a digital currency “experiment” proposal.
Banque de France hopes the new experimental proposal will help the central bank understand the risks and mechanisms of a Central Bank Digital Currency (CBDC).
France’s central bank wants to experiment with integrating digital currencies.
France has the largest GDP of any EU member currently exploring the implementation of a CBDC.
Banque de France has insinuated several experimental fintech projects for several years through both job postings and speeches.
In December, François Villeroy de Galhau, Governor of the Banque de France stated “central banks must and want to take up this call for innovation at a time when private initiatives — especially payments between financial players — and technologies are accelerating, and public and political demand is increasing.”
“Other countries have paved the way; it is now up to us to play our part, both ambitiously and methodically.”
The current proposal featured a three phase experimental project, which includes designing a CBDC, analyzing its effects, and implementing processes.
According to Banque de France, there will be no money creation.
All exchanges will direct through the bank’s own books with digital assets destroyed at the end of each payment day.
It is unclear whether Banque de France will implement a blockchain-based CBDC, “but innovativeness is a selection criterion.”
Potential applicants must “be established” within the EU. The central bank will select up to 10 candidates on July 10.
Christine Lagarde, a former minister of the economy for France, is head of the European Central Bank. She’s advocated for the ECB to expand its role in developing CBDC since assuming the post last November.