- The Banque de France has selected eight candidates for its experimental Central Bank Digital Currency
- Candidates include Société Générale, HSBC, and Seba Bank
- France is well advanced in its desire to create a CBDC
The Banque de France has selected eight candidates for its experimental Central Bank Digital Currency (CBDC). The shortlist, whittled down from all the applications it received following its call for applicants in mid-May, includes household names such as HSBC and Société Générale but also a number of smaller blockchain companies, all of whom hope to be awarded to contract to create what would be the biggest CBDC to date.
French CBDC Gets One Step Closer
Banque de France announced the eight candidates yesterday, each of whom will now begin work with the French central bank “in the coming days” in order to create their version of a CBDC over the coming months:
- Seba Bank
- Société Générale – Forge
Names such as HSBC and Société Générale will be familiar to most, but others will be unknown quantities, although each has very strong qualifications for the task of providing the backbone of France’s future settlement infrastructure. Société Générale has already completed a successful test of a CBDC, which might put them in prime position to be awarded the contract, but there will be stiff competition from the other seven contenders.
Smaller Blockchain Firms Aiming High
Among the smaller companies, Iznes might have one of the strongest claims to operate France’s CBDC. The record-keeping mutual fund platform launched in 2017 using the SETL blockchain system and already boasts partnerships with, among others, Allianz GI, Aviva Investors, and BNP Paribas AM.
LiquidShare, which is based on the Ethereum network and is actually financially backed by Société Générale, is already working with blockchain solutions company ConsenSys on a settlement platform and has successfully executed pilots with 15 financial institutions, including BNP Paribas and Société Générale themselves.
Lithuania Leads the Way
Banque de France says that the experiments hope to achieve three principal targets:
(i) to explore new methods of exchanging financial instruments (excluding crypto-assets) against central bank money, (ii) to test the regulation in central bank digital money in order to improve the conditions of execution of cross-border payments and (iii) revisit the methods of making central bank money available.
France is one of the most advanced of the European nations in researching a CBDC, although Germany isn’t far behind. Lithuania is perhaps the most advanced, having announced a pilot program is ready for public use imminently.