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Banque de France plans CBDC experiments

Banque de France plans CBDC experiments

France's central bank is calling for applications from firms interested in experimenting with the use of a digital euro for interbank settlements.

Like many of its counterparts around the world, Banque de France has been investigating central bank digital currencies (CBDCs) for years.

In December, governor François Villeroy de Galhau said that while CBDCs are neither a "precondition for nor a guarantee of more efficient payments" it is time for central banks to "take up this call for innovation".

Specifically, the bank is now looking to carry out experiments to answer three questions:

  • How "traditional" interbank settlements could be carried out using a CBDC
  • What are the benefits of a CBDC for the current market and payment infrastructures
  • What effects a CBDC wold have on financial stability, monetary policy, and the regulatory environment

The central bank is inviting players based in the EU to apply by 15 May to help carry out the experiments. Up to 10 applicants will then be picked in June.

Applicants will have "a high degree of flexibility in defining their projects" and, while the bank is not imposing any specific technology, (such as blockchain) an "innovative nature will be a selection criterion".

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