The Banque de France has concluded that its wholesale central bank digital currency (wCBDC) could enhance cross-border payments, settlement finality, and security for a wide array of financial assets.
This conclusion comes after conducting several tests using crypto-powered technologies.
The central bank on Friday stated, "Through these experiments, the Banque de France shows the operational feasibility and practical implementation of the three models it has conceptualized for issuing wCBDC directly on DLT [distributed ledger technology]."
The bank used various types of DLT to test applications in asset tokenization and the enhancement of cross-border transactions.
The French Central Bank embarked on wCBDC experiments in March 2020. By mid-2022, it had entered the second stage of experiments and has since completed twelve tests.
These include settling a bond worth 100 million euros ($104 million) with Luxembourg and projects with the Monetary Authority of Singapore, the Swiss National Bank, and the Innovation Hub of the Bank For International Settlements (BIS).
Also Read: FTX Scandal: Sam Bankman-Fried's Dad Accused Of Bankrolling Defense With Illegal Funds
The bank's experiments have demonstrated that a wholesale CBDC would be crucial for native digital assets and tokenized assets that fall under the category of unlisted financial assets and which cannot currently be settled.
Central banks worldwide are actively testing CBDCs to enhance wholesale settlements, with the monetary authority grouping BIS leading multiple experiments.
Similar tests have commenced in India, while the European Central Bank plans to start in 2024.
The Banque de France has stated that supporting Europe's exploratory work will be one of the subsequent steps.
The French central bank has found that issuing a wholesale CBDC would complement retail CBDCs such as a digital euro.
The bank has identified interoperability for seamless data exchange, international cooperation, and public-private partnerships for a more inclusive global CBDC framework as priorities.
The bank also noted, "climate concerns highlight the need to develop energy-efficient solutions in the design of wholesale CBDCs."
Read Next: Crypto Billionaire's Brother Planning To Buy An Entire Nation For Apocalypse Bunker
Join Benzinga's Future of Crypto in NYC on Nov. 14, 2023 to stay updated on trends like AI, regulations, SEC actions & institutional adoption in the crypto space. Secure early bird discounted tickets now!
Photo: Unsplash
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
