France’s Central Bank to Test Digital Currency, Trial Blockchain Tech in Banking Functions

The digital currency race is heating up. Banque De France, France’s central bank, has announced plans to start testing a digital currency as early as the first quarter of 2020. According to an update by news agency AFP, pressure from Facebook’s Libra and similar initiatives is triggering an accelerated timetable.

The central bank’s governor Francois Villeroy de Galhau says the creation of a central bank digital currency (CBDC) is a crucial focus.

“We want to start running experiments rapidly and will launch a call for projects before the end of the first quarter of 2020.”

Speaking on Wednesday at a finance conference in Paris, Villeroy says he’s eager to support the use of a CBDC in order to exchange and settle tokenized financial assets between financial companies.

“We have to make our contribution to this innovation, but in a serious and methodical way…

“I see an advantage in quickly moving forward to issue at least a wholesale central bank digital currency in order to be the leading issuer in the world and thus reap the benefits of having a benchmark CBDC.”

France’s central bank recently posted job listings, calling for an experienced crypto-economics analyst with a solid knowledge of game theory and public or private blockchain as well as a development engineer to lay out the bank’s digital strategy and identify blockchain applications for key banking functions.

According to the listing,

“The trainee will be tasked with learning one or more of these technologies (Ethereum, Quorum, Hyperledger, Corda, etc.) in order to understand the foundations of decentralized treatments and apply them to create prototypes. Experiments will be carried out on interbanking services, payments, post-market securities/cash processing as well as other central banking activities that could benefit from the contribution of innovative technologies.”

France is among several countries, including the US and China, that are experimenting with digital currencies.

Last month, Federal Reserve Chairman Jerome Powell responded to lawmakers who urged him to consider issuing a digital US dollar. Despite ongoing calls to move forcefully and rapidly to gain a first-mover advantage, the Chairman confirmed that the US is exploring the option but not yet outright developing the technology.

Wrote Powell,

“The Federal Reserve is not currently developing a U.S. dollar central bank digital currency (CBDC), but continues to carefully evaluate the costs and benefits of issuing a general purpose CBDC, defined as a new type of Federal Reserve liability that could be held directly by households and businesses.”

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