Bank of France Explores Partnerships for CBDCs

The central bank of France is planning to collaborate
with private companies in the rollout of a central bank digital currency (CBDC)
for institutional and retail clients. The bank issued
recommendations for policies that could support the launch of CBDCs in the country.

The central bank of
France conducted an experiment on wholesale CBDC in 2020. A wholesale CBDC is a
digital representation of the currency issued by a central bank to
institutions, while retail CBDCs are meant for everyday use by consumers.
Currently, the Bank of France is studying the feasibility of issuing wholesale
CBDCs on a distributed digital ledger.

Additionally, the Bank of France proposes
interoperability between the systems of the traditional financial institutions
and the distributed ledger platforms supporting the CBDCs. Besides that, the institution wants the technology
around the digital assets to be energy-efficient to prevent any negative impact on the environment.

The International
Monetary Fund’s Managing Director, Kristalina Georgieva, holds similar views
about the interoperability of the networks supporting CBDCs. In a report
by Finance
Magnates in June, the
IMF disclosed that it was working
on a global infrastructure for
CBDCs.

Additionally, the
experiments conducted by the Bank of France aim to assess the tokenization
Tokenization

Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen

Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single…