Banque de France takes a huge step towards digital euro
France is on the move for discovering benefits and use cases for digital euro. The country's central bank is currently working on launching an experimental program designed to test a digital euro in settlement procedures.
As stated in the bank's announcement of March 27, the scope of this program is to assess the potential of decentralized technologies and to identify reliable use cases for Central Bank Digital Currencies (CBDC).
First and foremost, the initiative aims to determine if and demonstrate how the use of digital currencies can contribute to settling inter-bank transactions and other procedures. Another objective is to analyze the potential effects of CBDC on financial stability, monetary policy, and the regulatory environment. All qualified and interested parties are welcome to participate in conducting the tests as long as each entity is established within the European Union or in a state party to the EU Area agreement. The applicants are also required to present their proposals for analysis of at least one of the predetermined use cases, which include payment through a token, a digital currency of another central bank or other digital assets defined by the French Monetary and Financial Code.
The central bank has however stressed that these experiments will not entail digital money creation:
“However, representation of central bank money shall be limited to the accounting day on which payment is made, and payment finality shall be recorded in the accounts in central bank money, as the token has no legal force".
The deadline for submitting applications is May 15. The final selection is to be made on July 10 following a series of initial interviews due in June.