Group items tagged

On June 18, the Banque de France successfully conducted a central bank digital currency (CBDC) experiment with SEBA Bank, as part of the experimental program launched in March 2020. The CBDC was used to simulate the settlement of listed securities and trigger their delivery in the TARGET2-Securities (T2S) test environment, using T2S's conditional securities delivery (CoSD) feature. The Banque de France simulated CBDC issuance on a public blockchain, preserving control and confidentiality of transactions using a dedicated smart contract. https://www.banque-france.fr/en/communique-de-presse/banque-de-france-conducts-new-central-bank-digital-currency-experiment

U.K.-based digital bank Revolut's "free-account" customers will face fees on FX transfers starting on August 12. Sending money abroad will cost 1 Swiss franc for Swiss Franc transfers, 4 francs for transactions in dollar and 6 francs in any other currency. Furthermore, the upper limit for free exchange orders will be lowered to 1,250 francs and the percentage charged for orders on weekends increased to 1 percent from 0.5 percent.

An experimental wire transfer was carried out between two individuals, located respectively in France and Tunisia, in commercial bank money through transfer of wholesale central bank digital currency (CBDC) between Banque de France and Banque Centrale de Tunisie. The operation took place on the Instaclear interbanking transaction solution based on the private distributed ledger operated by Prosperus, and both central banks have exchanged CBDC tokens in secured conditions. Bank Wormser Frères, la Banque Internationale Arabe de Tunisie and its French subsidiary BIAT France, were also part of this operation.

The central banks of West Africa have taken a major step towards breaking their monetary ties with Europe, launching their long-awaited "eco" currency and cutting some historic ties with France. On December 21, the Economic Community of West African States (Ecowas) declared the bloc's currency would be renamed from the CFA franc to the eco, to be overseen by the Central Bank of West African States (BCEAO). Those adopting the eco are currently Benin, Burkina Faso, the Ivory Coast, Guinea Bissau, Mali, Niger, Senegal and Togo.https://www.bceao.int/fr/communique-presse/communique-de-presse-reforme-du-franc-cfa

A consortium of institutions led by Euroclear have completed a test run of the use of wholesale central bank digital currency (CBDC) for settling French treasury bonds on a blockchain. The experiment, using technology from IBM and commissioned by the Banque de France included Agence France Trésor, BNP Paribas CIB, Crédit Agricole CIB, HSBC, Societe Generale. The trial is part of a wider Banque de France initiative commissioned in March 2020, to test the integration of a central bank digital currency for the exchange and settlement of tokenised financial assets between financial intermediaries.

The Bank for International Settlements (BIS) Innovation Hub, Bank of France and Swiss National Bank launched Project Jura that, together with a private sector consortium led by Accenture, will conduct an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement on a distributed ledger technology (DLT) platform. The private sector consortium includes Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS. It will involve the exchange of financial instruments against a euro wCBDC through a delivery versus payment (DvP) settlement mechanism and the exchange of a euro wCBDC against a Swiss franc wCBDC through a payment versus payment (PvP) settlement mechanism. These transactions will be settled between banks domiciled in France and in Switzerland, respectively.

The Governor of the Banque de France, proposed a pan European DLT infrastructure. It would support CBDC and tokenised bank deposits to settle transactions for DLT-based tokenized assets on the same network. It acknowledged the concept is echoed in the BIS's recent paper on a 'game changing' Unified Ledger and the IMF's XC concept for cross border payments. https://www.banque-france.fr/en/intervention/regulation-and-innovation-yin-and-yang-financial-sector

The Banque de France successfully completed the last experiment of its program for interbank settlements in wholesale central bank digital currency (CBDC), launched in March 2020. This final experiment involved the issuance of a digital bond on a blockchain and subscription with settlement in It successfully tested an end-to-end digital asset transactional lifecycle, through issuance, subscription by several actors, and coupon payment involving a conversion into another currency. All those transactions occurred across different blockchain environments operated by HSBC for the custody of the assets, and by the Banque de France for the securities settlement and the CBDC. The next phase of the Banque's CBDC experiments will be mainly dedicated to cross-border transactions.

"The Monetary Authority of Singapore and the Banque de France today announced the successful completion of a wholesale cross-border payment and settlement experiment using multiple central bank digital currencies (mCBDCs). The experiment between the two central banks, supported by J.P. Morgan's Onyx, simulated cross-border transactions and cross-currency transactions involving a Singapore dollar CBDC and a euro CBDC, and was conducted using a permissioned, privacy-enabled blockchain based on Quorum technology." For more detail see: https://www.mas.gov.sg/news/media-releases/2021/monetary-authority-of-singapore-and-banque-de-france-break-new-ground-in-cbdc-experimentation

Bank of France: stablecoins could impact EU financial sovereignty 'for decades' Banque de France Governor Villeroy de Galhau warned that Big Techs, capitalizing on their global market penetration, will build private financial infrastructures and monetary systems, competing with the public monetary sovereignty since they will position themselves as issuers and managers of a universal currency. Prospective central bank digital currency (CBDC) could then end up being issued at the 'backend of a future Big Tech stablecoin. Individual jurisdictions could then respond to the overwhelming pressure of private payments assets by issuing their own CBDCs, both domestically and globally - but without sufficient coordination in the global financial community. The articulation of these multiple CBDCs with private sector initiatives would risk sidelining input from other central banks. He stressed that the European Central Bank (ECB) and the Eurosystem as a whole cannot allow itself to "lag behind on a CBDC. https://www.bis.org/review/r200911b.htm

The Banque De France has selected eight potential partners, including HSBC, Accenture, and Seba Bank, in its hunt to modernize interbank settlement via a central bank digital currency (CBDC). The Banque De France also laid out the specific criteria for the CBDC proposals, noting that they aim to "explore new methods of exchanging financial instruments," but specifically excluding crypto-assets such as Bitcoin. The experiments will also test CBDC regulations to improve the execution of cross-border payments, and revisit methods of making central bank money available.

The Banque de France (BdF) published an updated set of conclusions and lessons learned from its twelve distributed ledger technology (DLT) based wholesale central bank digital currency (CBDC) experiments. They show the operational feasibility and practical implementation of the three models it has conceptualized for issuing DLT-based wholesale CBDC; the interoperability, distribution and integration models. They all address key aspects of wholesale CBDC implementation and each model offers different capabilities and functionalities compared to the conventional systems, so they can be complementary rather than exclusive.

France's Financial Markets Authority is poised to approve a first tranche of crypto-related companies under new rules on digital coins. Under the rules, set to come into force late this month, crypto-related firms will voluntarily abide by standards on capital requirements and consumer protection and pay tax in France, in exchange for approval from the regulator.

France is creating a G7 task force to study how central banks ensure cryptocurrencies like Facebook's Libra are governed by regulations. Governor Francois Villeroy de Galhau said the task force would be led by Benoit Coeure, a ECB board member.

The Banque de France published a report on its series of experiments with a wholesale central bank digital currency (#CBDC) but says its work has also thrown up new questions. The tests focused on ways of integrating CBDC into innovative procedures for the exchange and settlement of financial assets, based on new technologies such as distributed ledger technology (DLT), and in multi-currency and cross-border settings. The report covers nine experiments which were conducted as of September 2020 in conjunction with domestic and international private sector players, as well as other central banks and public authorities. Numerous technological partners were also involved, enabling the experiments to explore a broad range of technologies.

The Bank for International Settlements, Bank of France and Swiss National Bank have shown that wholesale CBDC can be used to settle transactions between financial institutions across borders. The recently completed Project Jura explored settling FX transactions in euro and Swiss franc wholesale CBDC, and issuing, transferring and redeeming tokenized euro-denominated French commercial paper between French and Swiss financial institutions. Project Jura was conducted in collaboration with Accenture, Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS.

The European Investment Bank (EIB) launched Project Venus, their second euro-denominated digitally native bond issue and first using private blockchain technology. The €100 million, two-year bond was issued, recorded and settled using private blockchain-based technology on Goldman Sachs' GS DAPTM tokenization platform. Although investors purchased and paid for the security tokens using traditional currency, the transactions were settled in wholesale CBDC issued by the Banque de France and the Banque Centrale du Luxembourg. Société Générale Security Securities Services (SGSS Luxembourg) provided on-chain custodian services.

The Banque de France has joined a consortium of 14 banks and market infrastructures launched by SWIFT, to conduct a new central bank digital currency (CBDC) experiment for interbank settlement purposes. The objective of the experiment is to issue cross-border payments in a test environment to study the interoperability between different distributed ledger technologies (DLTs) and existing payment systems. These payments will be made in simulated CBDC issued by the participating central banks.

The Paris prosecutor's office is reportedly investigating Binance for allegedly offering its digital asset services illegally. Furthermore, authorities have accused the exchange of engaging in acts of aggravated money laundering, which include competing with investment operations, concealing funds, and converting illicit proceeds. According to the Binance spokesperson, this was rumor was conflated from a routine on-site visit which is a regulatory requirement for financial institutions in France.

To help clarify Fintech regulatory positions and move policy forward, French and German regulators have started a variety of initiatives, ranging from novel legislation in France to preliminary expert hearings in Germany. France has paved the way with the "PACTE bill" and a new regime for crypto-asset players. Germany is taking a similar path with a public consultation launched by a cooperation of the Ministry of Finance and the Ministry of Justice in early March.