Today the Banque de France announced it completed the final experiment for its wholesale central bank digital currency (CBDC) trials. The project started in March 2020 and four months later, it announced a set of eight consortia participants, one of which was HSBC. However, while the trials are complete, a reference to a ‘first tranche’ of experiments hints at further work to come.
The latest tests involved HSBC and the issuance and trading of digital bonds, which were settled instantly using CBDC, enabling delivery versus payment (DvP). Foreign currency transactions were also exchanged in real-time as payment versus payment (PvP).
Given that banks already have access to central bank money in a digital form, there’s little point in having a wholesale CBDC unless it uses blockchain. An interbank CBDC’s primary purpose is to settle blockchain transactions either to exchange foreign currencies or to settle digital asset transactions, whether those assets are stocks, bonds, or something else.
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