• The French Central Bank has determined that its wholesale central bank digital currency (wCBDC) would improve cross-border payments, settlement finality and security for a vast range of financial assets after conducting numerous tests using technologies that power crypto.
• Banque de France began experiments on a wCBDC in March 2020, including projects with the Monetary Authority of Singapore, the Swiss National Bank and the Innovation Hub of the Bank For International Settlements (BIS).
• Experiments have shown a wholesale CBDC would “be key for native digital assets and tokenized assets that fall under the category of unlisted financial assets and which cannot currently be settled,” according to the bank.
French Central Bank Tests Show Wholesale CBDC Would Improve Cross-Border Payments
The French Central Bank has determined that its wholesale central bank digital currency (wCBDC) would improve cross-border payments, settlement finality and security for a vast range of financial assets after conducting numerous tests using technologies that power crypto.
Banque de France began experiments on a wCBDC in March 2020, including projects with the Monetary Authority of Singapore, the Swiss National Bank and the Innovation Hub of the Bank For International Settlements (BIS). Experiments have shown a wholesale CBDC would “be key for native digital assets and tokenized assets that fall under the category of unlisted financial assets and which cannot currently be settled,” according to the bank.
Monetary Authority Of Singapore Proposes Standards For Using Digital Money
The Monetary Authority of Singapore (MAS) has proposed standards for using digital money, including central bank digital currencies (CBDCs) and tokenized bank deposits, on a distributed ledger. This technical white paper was produced by MAS along with other International Monetary Fund (IMF) institutions.
Experiment Details
Banque de France conducted two stages of experiments beginning in March 2020. The first stage included twelve experiments where different types of DLT were used to test applications in asset tokenization as well as improvements in cross-border transactions. One experiment even managed to settle bond worth 100 million euros ($104 million) with Luxembourg!
Conclusion: Benefits Of WBCDCC
The experiments have shown that having access to a WBCDCC will bring several benefits such as improved cross-border payments; increased settlement finality; enhanced security; ability to use native digital assets; ability to use tokenized unlisted financial instruments; etc.. Therefore it is evident why many countries are now testing their own versions of WBCDCCs!
Future Developments
With more countries exploring this technology, we can hope there will be more developments regarding WBCDCC’s in future as well as an increase in innovation within banking sector itself!