Banque de France Extends Wholesale CBDC Experiment

Banque de France has extended its testing of the use of a central bank digital currency (CBDC) for the wholesale market.

• The latest experiment involved a CBDC used to simulate the settlement of securities using TARGET2-Securities (TS2), the European Central Bank engine for instantaneous settlement, an announcement Monday said.
• The French central bank simulated CBDC issuance on a public blockchain, harnessing a dedicated smart contract to trigger delivery of the securities.
• The experiment was conducted in collaboration with Swiss digital-asset bank SEBA and Luxembourg private bank Banque Internationale à Luxembourg.
• Banque de France has been experimenting with CBDCs for wholesale purposes, focusing on bank-to-bank transactions rather than the retail market.
• In January the French central bank completed the interbank settlement of around €2 million on a private blockchain provided by U.K. startup SETL.
• Earlier this month, it partnered with the Swiss National Bank to start a joint cross-border CBDC experiment dubbed "Project Jura" for the wholesale-lending market.

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