France Becomes First European Country to Test a Digital Euro
Image Credit: PositiveMoney.eu
  • The French central bank successfully completed a pilot program using digital euro.
  • The digital euro will initially be used between banks, rather than by citizens. 
  • This first pilot will be followed by a series of experiments with other financial institutions, the bank said.

The world is experiencing a shift towards digital. The global health emergency COVID-19 has catalyzed the transformation from traditional to technological. The crypto sector is no different. Countries worldwide are slowly embracing the idea of a digital currency. 

One country is France which successfully piloted a digital Euro operational on a blockchain becoming the first one to do so. The Banque de France said in a statement that it along with and investment bank Societe Generale trialed a sale of securities for central bank digital currency (CBDC). 

Using blockchain technologies, the pilot tested the use of a central bank digital euro for inter-bank settlements which was completed on May 14. The bank indicated it would require further robust trials. This test of security issuance for the digital euro was based on the technology the central bank received following its call for applications in March this year.

“Since the start of the year, the Banque de France has embarked on an experimental approach to central bank digital currency, aimed at exploring with partners the potential contributions of new technologies to improve the functioning of the financial markets and more particularly interbank regulations (so-called “wholesale” CBDC) ,” it said in the statement.

“The results of these experiments will be an important element of the Banque de France’s contribution to the more global reflection led by the Eurosystem on the interest of an MDBC.”

Without divulging too much detail, it said that the pilot project will focus on wholesale rather than a retail segment. Retail CBDCs would operate open to regular users of Bitcoin or Apple Pay. 

The CBDC would be used by banks and financial institutions and not individuals yet. The Banque de France said the first was just one of the several it will carry out in the future with other financial institutions.

The bank tweeted: “Other experiments will be carried out in the coming weeks.”

The Bank of France has been working on the project for a while. In December 2019, Bank of France governor and Autorité de contrôle prudentiel et de resolution chairman François Villeroy de Galha said he wanted France to be the first country to issue a digital currency which will be tested in the first quarter of 2020.

“We are particularly keen to take part in experiments to integrate a “wholesale” CBDC into innovative procedures for exchanging and settling tokenized financial assets,” said de Galhau at the time.  

France is not alone in its attempt to leverage on blockchain for a digital asset. As TechMeru reported last week, countries including China are also working to launch their own digital currency.