France's central bank began to experiment with central bank digital currency (CBDC) applications and use cases this spring.
As previously reported, the Banque du France is specifically testing a so-called digital euro in the context of clearing and settlement of tokenized assets. And at the time, the central bank stressed that such experiments were just that — trials, nothing more.
New comments from a senior Banque du France official indicate that the institution is looking past the horizon, however, as the Eurosystem moves closer to the potential approval of a digital euro. ECB chief Christine Lagarde has spoken on numerous occasions, and an up-or-down decision is expected as early as January.
On December 10, Denis Beau, first deputy governor of the French central bank, spoke about financial technology innovation, during which he touched on the ongoing CBDC experiments. In remarks, he stressed the trial's expansive nature and its potential to rewrite the current regulatory framework.
As he noted (emphasis ours):
"Upcoming CBDC experiments – there will be eight of them – will help us to investigate not only the potential of technology but also to question the players in the ecosystem on what tomorrow’s landscape could look like, on subjects as fundamental as the methods of exchanging financial instruments for CBDCs, the improvement of the conditions for executing cross-border payments or new ways of making CBDCs available to financial sector players. In turn, these experiments will lead us to assess whether the regulatory framework currently in force needs to be adapted since we are carrying out these experiments within the current legal framework."
Beau also framed the trials as part of the Banque du France's preparation efforts should a digital euro move toward fruition.
"The experiments underway directly relate to the need for the Eurosystem, should circumstances so require, to be ready to issue a CBDC in order to ensure that central bank money is accessible to the general public and to preserve their freedom of choice of means of payment and their confidence in our currency," Beau said, according to the published remarks.