The financial industry is undoubtedly preparing with tokenization its next great technological revolution. Central banks cannot stay away from these transformations, even if they tend to resist some of them.
Thus, Facebook’s Libra electronic money project had provoked an outcry from the authorities and central bankers. In response, they had accelerated their experiments around central bank digital currencies or MNBC.
Facebook’s Libra threat is no more
Since then, Libra (now Diem) has died and the sting has become less pressing for institutions. However, central banks have not given up on their CBDC ambitions. According to the Bank for International Settlements (BIS), 93% are interested in it – more or less seriously.
Additionally, more than half are conducting actual experiments or working on a pilot. But in this sector, the initiatives are part of the long term. The BIS estimates that 15 retail CBDCs and 9 wholesale CBDCs could be issued in 2030.
The first category consists of a currency usable by individuals, when the wholesale or wholesale CBDC is intended for banks only. And it is more particularly on this second category that the developments of the Banque de France relate.
Even if the impacts and the stakes – in particular for financial stability – of such a currency are a priori less than for a retail CBDC, the French institution does not intend to rush. Its work began effectively in March 2020 and has already highlighted the advantages of a digital currency.
CBDC: assets for the governor of the BdF
For its governor, François Villeroy de Galhau, the wholesale CBDC responds to two “decisive” use cases likely to “improve the payments ecosystem”, namely the tokenization of securities and cross-border settlements.
To date, the Banque de France has carried out 12 tests and published two reports to take stock of its achievements – the last a few weeks earlier, on July 21. The BdF thus indicates that it has conceptualized and implemented three digital currency models.
And for issuing a digital currency directly on DLT, all three are feasible: the interoperability, distribution and integration model. And the central bank to consider them as “complementary rather than exclusive. »
But when will the research end and a transition to practical work be completed? At the end of last year, the Governor of the Banque de France expressed his wish to achieve a viable prototype by 2023.
As far as a finalized broadcast is concerned, it has not yet been announced – any more than for the Digital Euro, in which the BdF is also collaborating. The French institution has two new steps on its horizon: “support the exploratory work of the Eurosystem and explore the limits of cross-border payments. »