The central bank of France is apparently thinking about a cryptocurrency initiative in the future. In fact, we can see that they already launched an experimental program that will investigate the feasibility of rolling out its own central bank digital currency (CBDC) for interbank settlements.
As a document in the Ethereum news shows after it was released on Monday, the Bank of France already invited the interested parties to participate in the program and the applications are due by May 15th.
The plan, right now, is to identify a number of economic benefits and potential use cases for such a digitized national currency. As officials from the bank said:
“The challenge of these experiments is not to replace these two existing forms of central money, but to identify how innovative technologies could improve the efficiency and fluidity of payment systems and financial infrastructures, allowing a better financial sector to ensure the smooth financing of the economy.”
The central bank of France is also eyeing the idea of using cryptocurrencies to power CBDCs. In this respect, an internal report in the Ripple news emerged showing that both Ethereum (ETH) and Ripple (XRP) are the two crypto assets that could be used in an initiative like this. The initiative reads:
“This solution could be employed to carry out end-to-end transactions, including final settlement, using assets that are tokenised on a blockchain…
Since the attributes of a unit of the wholesale CBDC (file representing the currency unit, keys enabling use) may be integrated in a cryptoasset circulating on another blockchain, which is possible on Ethereum and Ripple, for example, it would then become possible to use the unit on this blockchain.
The wholesale CBDC unit could be exchanged via the secondary blockchain between entities not belonging to the digital currency’s formal circulation network.”
The experimental project was scheduled in December 2019 by François Villeroy de Galhau, who is the governor of the bank of France. According to reports, Galhau wants to make France the first country that will issue a central bank digital currency (CBDC).
As the regulator said, a CBDC could be the solution that people need in search of a more liquid and safe payment instrument which can help and keep up with the fast-paced technological changes.