The Bank of France is officially launching a program of experiments to test the integration of a CBDC for interbank settlements, inviting potential participants to submit their applications.
Applicants must “be established” in the European Union. Banque de France will select up to 10 candidates on July 10.
The project is to experiment the use of a digital euro, aiming to explore the potential CBDC opportunities for clearing and settlement of tokenised financial assets.
France’s project covers the following use cases: payment against financial instruments; payment against other central banks’ digital currency; and payment against digital assets.
The project will examine CBDC’s potential consequences on market infrastructures, monetary policy, macroeconomic factors and legal and regulatory frameworks.
The bank emphasized that it will not engage in money creation within its CBDC experiment. Additionally, the central bank noted that it will be destroying the token reflecting the amount in euros in digital form at the end of the accounting day on which payment was made.
According to the central bank, “These experiments will act as a contribution by the Banque de France to a broader discussion within the Eurosystem, which will make any decision on whether to set up a CBDC. The tests are not intended to be continued on a long-term basis or applied on a wide scale by the Banque de France itself.”
In early March, France’s markets regulator, the Autorité des Marchés Financiers, proposed a regulatory sandbox to experiment and explore potential benefits of security tokens within the European Union.