In a speech yesterday, François Villeroy de Galhau, the Governor of the Banque de France outlined the central bank’s expansion of its work on a wholesale central bank digital currency (CBDC). He wants the central bank to be ready to support the EU’s DLT pilot regime for tokenized securities which comes into force on 23 March 2023.
The Banque de France is planning another four or five experiments this year and in 2023, involving more private firms and other foreign central banks. It previously worked with the Swiss National Bank, the Monetary Authority of Singapore (MAS) and Tunisia’s central bank on separate cross border payment projects.
“We must make a CBDC available on these infrastructures to match market demand for tokens so that our settlement asset is not substituted by private assets – which would be riskier,” said the Governor. In the absence of a CBDC, other providers are exploring alternatives. For example, SIX has already tokenized Swiss francs and is exploring tokenizing commercial bank euros. As is Fnality, the settlement solution backed by 16 major institutions.
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