The Bank of France unveils that it will launch 8 different experimental tests for central bank digital currency. The European countries have increased their pace of developing a digital currency to meet the current demands.

The Goal of Eight Experiments

The central bank of France has moved from theoretical work to practical experimentation phase. Denis Beau, the first deputy governor of the central bank outlines the three major goals which are needed to study before its official launch for mass level. According to Beau:

“The goal is to determine i) how digital central bank money may improve the efficiency and fluidity of payment and settlement systems, ii) what are the most promising technologies and iii) whether it makes sense to make central bank money available to beneficiaries that do not have access to it yet.”

It is revealed that the first experiment from the bank has finished that study about the digital transactions in deep. He outlined three steps involved in a digital transaction including tokenization, digital representation, and the transaction’s settlement.

He unveiled that the bank will further carry out experiments, and potential changes in regulations are also expected. The planned eight experiments on the part of the Bank of France will happen within the boundaries set by the regulators. These experiments will also investigate to bring improvements in cross-border payments.

Moreover, the Bank of France is also working with the European Central Bank in an experiment dealing with the issuance of a central bank digital currency.

“This autumn, the Eurosystem has adopted a similar hands-on approach for its experiments on a digital euro for the general public, in which we are participating, alongside with the ECB and other Eurosystem central banks,” he added.

Bank of France is not alone in carrying out experiments for a digital currency as many other countries in Europe and Asia are making significant progress over the development of CBDC. As China has shown impressive growth, financial experts believe the Chinese digital yuan could pose a great threat to the US dollar. However, Zhou Xiaochuan, former governor of the People’s Bank of China, is not a threat to the US dollar or euro because it is not like Libra of Facebook. The major goal of digital yuan is to provide a perfect channel for cross-border payments.