Banque De France, the Central Bank of France, has said that it has successfully tested the use of a Central Bank Digital Currency (CBDC) for settling digital bonds by the European Investment Bank on a blockchain.
The experiment consisted in the subscription to EIB-issued digital bonds by investors, for a total amount of 100 million euros. Cash settlements were represented by Central Bank Digital Currency issued on a blockchain.
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This was the 3rd expriment conducted as part of the CBDC for Interbank settlement work program launched by Banque De France in mid-2020.
According to the regulator, the experiment required the development and deployment of smart contracts under secured conditions to enable the bank issue and control the circulation oc CBDC tokens and so that CBDC transfer could occur simultaneously with the delivery of securities tokens to the investors’ portfolio.
The experiment provided a demonstration of how central banks can bring the safest and most liquid settlement asset into innovative trading procedures on financial markets, thus ensuring maximum security for both issuers and investors.
Banque De France is expected to conduct additional experimentations to asset the uses of CBDCs in interbank settlements with the results proving key to Eurosystem’s global reflection on the benefits of CBDCs.
Read / Download the press release here.
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RECOMMENDED READING: [WATCH] CBDCs are Here But We Want to Do it Right Than Do it First, Says the U.S. Federal Reserve Chairman
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