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The Banque de France is calling for applications to experiment with a new programme on a central bank digital currency

Is a CBDC one step nearer?

13 April 2020

The Banque de France (the French central bank) is calling for applications to experiment the use of a digital euro issued for interbank settlements. These experiments aim at identifying how technological innovations may increase the efficiency and fluidity of payment systems and financial infrastructures and notably concrete cases integrating central bank digital currency (CBDC) in innovative procedures for the clearing and settlement of tokenised financial assets), rather than replacing the existing forms of central money.

The programme's results will be a key part of the Banque de France's contribution to the broader global study lead by the Eurosystem on the possible introduction of a CBDC. Indeed, the Banque de France highlights that any decision to create a CBDC is a matter for the Eurosystem, hence the Banque de France intention is not to create money through this programme.

The Banque de France further underlines that central bank money, used to ensure the security of settlements on financial markets, has a role to play in the context of a number of private initiatives proposing new digital channels and modes of exchange through the creation and circulation of digital tokens as part of the emergence of new forms of digital assets trend (with "utility tokens", "security tokens", "stable coins").


The project is pursuing 3 objectives:

  1. to demonstrate how 'traditional' interbank settlements in a central bank currency could be made with a CBDC thanks to technological innovations;
  2. to identify the benefits of a CBDC in the current payment and settlement infrastructures ecosystem, and to understand how a CBDC could foster financial innovation;
  3. to assess the potential effects of introducing a CBDC on financial stability, monetary policy and the regulatory framework.  

The experiments proposed by the Banque de France will cover the following use cases:

  1. payment in central bank money against delivery of listed or unlisted financial instruments ("delivery-versus-payment");
  2. payment in central bank money against the digital currency of another central bank ("payment-versus-payment"); and
  3. payment in central bank money against digital assets (as defined in article L. 54-10-1 2° of the French code monétaire et financier).
Application process

Applicants must be established in the EU or in a country part of the EEA and submit their application electronically by 15 May 2020 at 3pm (CET). Applications may be submitted individually or as part of a temporary business grouping. Other eligibility criteria, depending on the chosen use case, may apply such as: having a payment account in the French component of Target2, T2-BF or be a participant of a CSD.

A maximum of ten applications will be chosen, on the basis of several criteria, including (without limitation):

  • the innovations brought by the propositions made by the applicant; 
  • the adequacy between human and material resources the applicant intends to deploy to meet the target goals;
  • the experience and background of the person appointed to be the project leader;
  • the measures and procedures put in place to ensure security and controlling access during the project; 
  • the measures taken to ensure data confidentiality and protect access to data; and
  • the project's compliance with national, European and international regulatory frameworks.

Once applications have been chosen, the Banque de France, for the purposes of the experiments, will provided to selected applicants certain resources, including, amongst other things, the issuance of the token or other dematerialisation process representing central bank money in accordance with the procedures determined by each selected applicant, finality of payment transactions which will take place, as applicable, in the French component of Target2 and an interface, as required, with Target2-Securities. It should be noted that the Banque de France will not perform the functions of issuing a financial instrument, currency or digital asset.

Sophie Péligry contributed to the writing of this article.