Following the issuance of the CBDC (Sand Dollar) by the Bahamas almost a year before, China is moving forward with the e-CNY project thereof. There is no surprise that other nations are also looking for such a chance. However, following months of silent preparation, a big player out of Europe is at present surely in the competition.
As per a Financial Times’ published report, a CBDC is provided by Banque de France, which was utilized during a long trial of 10 months by the biggest participants of the financial market. The leader of the project was a financial firm based in Belgium, “Euroclear,” which is specialized in securities transactions’ settlement. According to the press release of Euroclear, the members participating in the project were Societe Generale, HSBC, Crédit Agricole CIB, BNP Paribas, Agence France Trésor, and Banque de France. In the meantime, features and support were provided by IBM, like capabilities of hybrid cloud and tokens having advanced privacy preservation.
A bigger program reportedly began by the Banque de France in 2020’s March, having a target of constructing a CBDC under France. Nonetheless, this particular trial aimed at assessing the productivity of the blockchain technology and CBDCs along with testing if the safe and quick settlement of the tokenized securities could be done. Up till now, nearly 500 test experiments have been done, with the government bonds of France or specifically the debt securities of French Sovereign, such as assets. In the meantime, the banks struggled as custodians and market players.
Testing the latest type of ‘Monet’
In a comprehensive report, it has been noted by Euroclear that it was suitable to utilize technology in managing the post-trading operations of the market in CBDC. Nevertheless, the firm emphasized the requirement for additional tests having higher volumes for transactions for allowing scalability. The report added that various issues, even now, possibly hinder the development in advance of the implementation of a platform of blockchain in a proper production environment, like the technology’s maturity, the organization of the platforms having distributed ledger, as well as interoperability with some other platforms.
The expected winner of the CBDC contest
In the earlier phase of October, Kristalina Georgieva (the Managing Director of the IMF) discussed stablecoins and cryptocurrency. She disclosed that more than 110 nations were at diverse phases of delving deep into CBDCs, as per a survey of the respective members by IMF. She confirmed that some drastic changes were being done. However, just a single CBDC was present.