France's central bank: First digital currency experiment a success

In December 2019, Bank of France President Francois Villeroy de Gayo announced that the Bank of France would begin experimenting with central bank digital currencies in 2020. This is the first of its kind in the Eurozone, and will help the Eurozone eventually launch a digital euro.

In an interview with French newspaper La Tribune around February 2020, Degas said that a final decision on the digital euro would be discussed within the framework of the euro system and would take time to study. The Bank of France's pilot work is focused on digital currencies used between financial institutions, but does not rule out the development of a digital currency that can be used by the general public in the future.

In April of the same year, despite the COVID-19, the Bank of France went ahead with the digital currency experiment. The Bank of France's pilot project, in partnership with private companies, uses blockchain technology to create digital currencies that are primarily used for interbank transactions. On May 20, the Bank of France announced that it had successfully tested the blockchain developed by its team, which could be used to issue central bank digital currency in the future. On May 27th the Bank of France issued an announcement calling on banks to take part in the trial of its digital currency from July. The July 20 announcement said eight banks had been identified to conduct a trial of interbank settlement using the central bank's digital currency. The purpose of the experiment is to explore the use of new financial instruments for transactions, to test the use of the central bank's digital currency for clearing, to improve the conditions for cross-border payments, and to test the way banks use the central bank's digital currency.

This year on January 19, the French bank's announcement said, beginning on December 17, 2020, the agency with IZNES companies succeed by testing the central bank digital currency, test the chain from the headquarters is located in the UK, the block SETL chain service providers, investors in the experiment can buy and sell in private block chain monetary fund share, test involves share is worth more than 2 million euros.

French media and researchers generally believe that the Bank of France's central-bank digital currency experiment is primarily a response to Facebook's introduction of Libra in 2019. But it is China that has made the most progress in central bank digital currencies. Le monde published in June 2020, titled "the central Banks in the study of digital currency", Harvard University digital currency experts kumar, said China's digital can the yuan against the dollar hegemony in the international payment system, such as using digital yuan around the use of economic sanctions dollar hegemony. According to the article, this is also why the European Central Bank is studying digital currencies, such as the Bank of France's interbank settlement using the central bank's digital currency, which will help strengthen the position of the euro in the world.