Yesterday the Banque de France announced it had completed a wholesale central bank digital currency (CBDC) transaction test for digital euros with a subsidiary of Société Générale.
Société Générale SFH issued €40 million of covered bonds on a public blockchain. The transaction was settled instantly with delivery versus payment (DvP) using the digital euros.
Last year SocGen issued €100 million in security tokens on Ethereum using its Société Générale Forge platform. However, in that case, the payment was made in the traditional way.
Two months ago, the Banque de France unveiled plans to test a wholesale CBDC and said ten applications would be selected to participate.
The Bank’s Governor Villeroy de Galhau previously expressed a desire for the European Central Bank (ECB) to be the first to issue a wholesale CBDC.
“I see a certain interest to move quickly on the issue of at least a wholesale MDBC (French for CBDC) to be the first issuer at the international level and thus derive the benefits reserved for a reference MDBC,” the Governor told Le Echos last year.
At the same time, Fnality, owned by 15 financial institutions is aiming to do a private payment platform, with the currency backed by central bank deposits. A digital euro is also on its radar.
Last week, an ECB board member highlighted an interesting possibility: it is unclear whether the ECB has the exclusive right to issue a CBDC. That’s because nations have the right to issue physical coins but not notes. So the question is whether it’s legal for nations to issue a digital version of those physical coins.