BANQUE DE FRANCE TESTS DIGITAL CURRENCY-BASED SECURITIES SETTLEMENT

Last updated: June 20, 2025, 00:13 | Written by: Brock Pierce

The Banque de France, France's central bank, is at the forefront of exploring the potential of central bank digital currencies (CBDCs) within the European financial landscape.The bank's recent activities highlight its commitment to understanding how a digital Euro, or more precisely a wholesale CBDC, could revolutionize securities settlement and cross-border payments. cointelegraph.com: The Bank of France has completed a central bank digital currency pilot for securities transactions in collaboration with Swiss crypto bank SEBA.Through a series of carefully designed experiments, the Banque de France is demonstrating the transformative power of tokenized central bank money, offering enhanced security, improved finality, and streamlined processes for a wide array of financial assets. The experimentation utilized the DL3S platform operated by the Banque de France under the aegis of the ECB, proving that wholesale CeBM can be used for conducting Delivery versus Payment (DVP) of fund units on three interoperable platforms: DL3S, IZNES and Societe Generale-FORGE.From government bonds to fund shares, the potential benefits extend to a diverse range of stakeholders involved in wholesale transactions. Through its experiments, the Banque de France shows that a tokenised form of central bank money could improve cross-border payments and settlement finality and security for a vast range of financial assets, from government bonds to fund shares, and a larger scope of stakeholders in wholesale transactions.These pioneering efforts are not merely theoretical exercises; they represent tangible steps toward a future where digital currencies play a central role in the financial ecosystem, optimizing settlement procedures and enhancing the efficiency of cross-border transactions.This article delves into the details of these experiments, exploring the technologies used, the partners involved, and the potential implications for the future of finance.

Central Bank Digital Currency (CBDC) Experimentation: A New Era for Securities Settlement

The Banque de France's foray into CBDC experimentation signifies a pivotal moment in the evolution of securities settlement. The French central bank has announced the successful completion of a central bank digital currency experiment. The trial involved using the CBDC to simulate the settlement of listed securities in a test environment. Banque de France partnered with Swiss bank SEBA as well as two Luxembourg institutions.Traditionally, securities settlement has been a complex and often time-consuming process, involving multiple intermediaries and potential points of friction. [ Septem ] Is EigenLayer Ready For Institutional Adoption? Cryptocurrency [ Septem ] Bitcoin Pulls Back Before Probable Fed Rate Cut CryptocurrencyHowever, the introduction of a CBDC, operating on a blockchain or distributed ledger technology (DLT) platform, has the potential to dramatically simplify and accelerate this process.

The Role of DL3S Platform

A key element in the Banque de France's CBDC experiments is the DL3S (Distributed Ledger for Securities Settlement System) platform. On, Banque de France successfully conducted a Central Bank Digital Currency (CBDC) experiment with SEBA Bank, as part of the experimental program launched in March . The experiment consisted in using the CBDC to simulate the settlement of listed securities and thus trigger their delivery in TARGET2-Securities (T2S), in testThis permissioned blockchain platform, operated by the Banque de France under the aegis of the European Central Bank (ECB), serves as the foundation for exploring the practical applications of wholesale CBDCs.The DL3S platform allows for the secure and efficient transfer of digital assets, enabling Delivery versus Payment (DVP) functionality for various types of securities.

The DL3S platform is not just a theoretical concept; it is a working infrastructure that has been used in multiple successful CBDC experiments.Its design prioritizes security, transparency, and interoperability, making it a crucial component in the Banque de France's exploration of digital currency solutions.

Key CBDC Experimentation Partnerships and Technologies

The Banque de France understands that successful CBDC implementation requires collaboration and technological expertise.Therefore, the bank has partnered with various institutions and technology providers to conduct comprehensive experiments.

SEBA Bank: A major Switzerland-based cryptocurrency bank, SEBA has partnered with the Banque de France to simulate the settlement of listed securities using a CBDC.This experiment involved triggering the delivery of securities in the TARGET2-Securities (T2S) environment, demonstrating the potential for seamless integration with existing settlement infrastructure.
Euroclear and IBM: Euroclear, a leading provider of post-trade services, has selected IBM as its technology partner for developing blockchain-based solutions for securities settlement.This collaboration aims to leverage IBM's blockchain expertise and Euroclear's deep understanding of post-trade processes to create innovative solutions for the financial industry.
Liquidshare: A blockchain securities startup, Liquidshare has collaborated with the Banque de France to conduct experiments focused on securities settlement. The Bank of France has completed a central bank digital currency pilot for securities transactions in collaboration with Swiss crypto bank SEBA.These experiments have demonstrated the feasibility of using wholesale CBDCs for conducting DVP of fund units across multiple interoperable platforms, including DL3S, IZNES, and Societe Generale-FORGE.
HSBC: HSBC partnered with Banque de France to create a foreign exchange settlement capability using CBDC.The collaboration aims to reduce costs and improve security in foreign exchange trading, representing a significant accomplishment for the global financial services.

These partnerships highlight the collaborative approach that the Banque de France is taking to explore the potential of CBDCs. The Bank of France has completed a central bank digital currency pilot for securities transactions in collaboration with Swiss crypto bank SEBA. The central bank of France Banque de France is continuing its work on the development of a European central bank digital currency (CBDC).By working with a diverse range of institutions, the bank is able to gain valuable insights into the practical challenges and opportunities associated with digital currency implementation.

Delivery Versus Payment (DVP) and the Benefits of CBDC

One of the key concepts underlying the Banque de France's CBDC experiments is Delivery versus Payment (DVP). [ ] Price predictions 5/5: SPX, DXY, BTC, ETH, XRP, BNB, SOL, DOGE, ADA, SUI Altcoin [ ] Bitcoin risks sub-$92K retest as BTC price fails to match 4% gold gains BitcoinDVP is a settlement mechanism that ensures that the transfer of securities occurs simultaneously with the payment of funds. The central bank of France Banque de France is continuing its work on the development of a European central bank digital currency (CBDC). On Monday the bank officially announced theThis simultaneous exchange mitigates the risk that one party will fail to fulfill its obligation, providing greater security and certainty to the settlement process.

CBDCs can significantly enhance DVP by providing a real-time, immutable, and transparent settlement mechanism. Our collaboration with HSBC, a leader in foreign exchange trading, and Banque de France, a pioneer in the use of central bank digital currency, to create a foreign exchange settlement capability that has the potential to reduce costs and improves security, is an important accomplishment that stands to benefit the global financial servicesThe benefits of using CBDCs for DVP include:

Reduced settlement risk: The simultaneous transfer of securities and funds eliminates the risk of one party defaulting on its obligation.
Faster settlement times: CBDCs can enable near-instantaneous settlement, reducing the time and cost associated with traditional settlement processes.
Increased transparency: The use of blockchain technology provides a transparent and auditable record of all transactions.
Improved efficiency: CBDCs can streamline settlement processes, reducing the need for intermediaries and manual interventions.

The Banque de France's experiments have demonstrated the potential of CBDCs to transform DVP, making it more secure, efficient, and transparent.

Wholesale vs.Retail CBDCs: Understanding the Difference

It's important to distinguish between wholesale CBDCs and retail CBDCs.While both are digital forms of central bank money, they serve different purposes and target different users.

Wholesale CBDCs: Designed for use by financial institutions for interbank payments and securities settlement.They are intended to improve the efficiency and security of wholesale financial markets.
Retail CBDCs: Designed for use by the general public for everyday transactions. The central bank of France Banque de France is continuing its work on the development of a European central bank digital currency (CBDC). On Monday the bank officially announced the successful completion of a CBDC experiment with major Switzerland-based cryptocurrency bank SEBA. Conducted in collaboration with SEBA, Banque Internationale Luxembourg, and Luxembourg centralThey are intended to provide a digital alternative to cash and to promote financial inclusion.

The Banque de France's current experiments are primarily focused on wholesale CBDCs.The bank believes that wholesale CBDCs have the potential to address specific challenges in the financial industry, such as improving cross-border payments and securities settlement.

TARGET2-Securities (T2S) and CBDC Integration

The Banque de France's experiments have also explored the integration of CBDCs with TARGET2-Securities (T2S), a European securities settlement engine.T2S is a platform operated by the Eurosystem that allows for the settlement of securities transactions in central bank money across multiple European countries.

Integrating CBDCs with T2S could further streamline securities settlement and enhance cross-border payments. Banque de France participated directly in the experiment by acting as the Central bank to manage the CBDC process and by making available a permissioned blockchain platform (hereafter DL3S 3). Euroclear selected IBM as technology partner based on their blockchain and post-trade know-how on the development ofBy using CBDCs for settlement within the T2S environment, financial institutions could benefit from faster settlement times, reduced settlement risk, and increased transparency.

The successful integration of CBDCs with T2S would represent a significant step toward creating a more integrated and efficient European financial market.

Addressing Potential Challenges and Risks

While CBDCs offer numerous potential benefits, it's essential to acknowledge and address the potential challenges and risks associated with their implementation. הבנק המרכזי של צרפת - בנק דה פראנס - ממשיך בעבודתו על פיתוח מטבע דיגיטלי של הבנק המרכזי באירופה (CBDC).These challenges include:

Cybersecurity risks: CBDC systems could be vulnerable to cyberattacks, which could compromise the security of transactions and the integrity of the system.
Operational risks: The operation of CBDC systems could be disrupted by technical failures or other operational issues.
Privacy concerns: The use of CBDCs could raise privacy concerns, as central banks would have access to detailed information about users' transactions.
Financial stability risks: The introduction of CBDCs could have implications for financial stability, such as potentially disintermediating banks or creating new liquidity risks.

The Banque de France is actively considering these challenges and risks in its CBDC experiments.The bank is working to develop appropriate safeguards and risk management measures to mitigate these potential negative impacts.

The Future of Digital Currency-Based Securities Settlement

The Banque de France's ongoing CBDC experiments are paving the way for a future where digital currency-based securities settlement is a reality.While the widespread adoption of CBDCs may still be several years away, the bank's pioneering efforts are laying the groundwork for a more efficient, secure, and transparent financial system.

Potential Impacts on Financial Institutions

The adoption of CBDCs could have a significant impact on financial institutions, potentially leading to:

Reduced operational costs: Streamlined settlement processes could reduce operational costs for financial institutions.
Increased efficiency: Faster settlement times and reduced settlement risk could improve the efficiency of financial operations.
New business opportunities: CBDCs could create new business opportunities for financial institutions, such as the development of innovative digital financial products and services.
Increased competition: The introduction of CBDCs could increase competition in the financial industry, potentially leading to lower fees and better services for customers.

The Broader Implications for the Financial Ecosystem

The adoption of CBDCs could have broader implications for the financial ecosystem, potentially leading to:

Improved cross-border payments: CBDCs could facilitate faster and cheaper cross-border payments, reducing the need for intermediaries and improving the efficiency of international trade.
Enhanced financial inclusion: CBDCs could provide access to financial services for unbanked and underbanked populations, promoting financial inclusion and economic development.
Increased transparency: The use of blockchain technology could increase transparency in the financial system, making it more difficult for illicit activities to occur.
Greater innovation: CBDCs could foster greater innovation in the financial industry, leading to the development of new and improved financial products and services.

Frequently Asked Questions (FAQs) About CBDC Securities Settlement

What is a CBDC?

A Central Bank Digital Currency (CBDC) is a digital form of a country's fiat currency, issued and backed by the central bank. Welcome! Log into your account. your username. your passwordIt's essentially a digital version of cash, but unlike cryptocurrencies, its value is stable and controlled by the monetary authority.

Why is the Banque de France testing CBDCs?

The Banque de France is testing CBDCs to explore their potential benefits for securities settlement, cross-border payments, and overall financial stability.The bank aims to understand how digital currencies can improve efficiency, reduce risk, and foster innovation in the financial system.

What are the benefits of using CBDCs for securities settlement?

CBDCs offer several benefits for securities settlement, including reduced settlement risk, faster settlement times, increased transparency, and improved efficiency.They can also help to streamline cross-border transactions and reduce the need for intermediaries.

What is Delivery versus Payment (DVP)?

Delivery versus Payment (DVP) is a settlement mechanism that ensures that the transfer of securities occurs simultaneously with the payment of funds. Today the Banque de France announced the completion of another wholesale central bank digital currency (CBDC) experiment. This time it was for securities settlement with a consortium created by blockchain securities startup Liquidshare.This simultaneous exchange mitigates the risk that one party will fail to fulfill its obligation.

What is the DL3S platform?

DL3S (Distributed Ledger for Securities Settlement System) is a permissioned blockchain platform operated by the Banque de France under the aegis of the ECB.It serves as the foundation for exploring the practical applications of wholesale CBDCs for securities settlement.

Are CBDCs the same as cryptocurrencies like Bitcoin?

No, CBDCs are not the same as cryptocurrencies like Bitcoin.CBDCs are issued and backed by central banks, providing stability and control. Banque de France tests digital currency-based securities settlement The central bank of France Banque de France is continuing its work on the development of a European central bank digitalCryptocurrencies are decentralized and volatile, with no central authority backing their value.

What are the risks associated with CBDCs?

Potential risks associated with CBDCs include cybersecurity risks, operational risks, privacy concerns, and financial stability risks. بینک آف فرانس نے سوئس کرپٹو بینک ایس ای بی اے کے تعاون سے سیکیورٹیز لین دین کے لئے مرکزی بینک ڈیجیٹل کرنسی پائلٹ مکمل کرلیا ہے۔Central banks are actively working to address these risks and develop appropriate safeguards.

Conclusion: A Promising Future for Digital Finance

The Banque de France's extensive testing of digital currency-based securities settlement represents a significant step towards a more efficient and innovative financial future. Conducted in collaboration with SEBA, Banque Internationale Luxembourg, and Luxembourg central securities depository LuxCSD, the experiment used a CBDC to simulate the settlement and delivery of listed securities on TARGET2-Securities (T25), a European securities settlement engine.By embracing blockchain technology and collaborating with key players in the financial industry, the Banque de France is demonstrating the potential of CBDCs to revolutionize securities settlement and cross-border payments. [ Octo ] Binance CoinMarketCap Index Series kicks off by tracking top 10 crypto Ethereum [ Octo ] Morgan Stanley Predicts Over 15% Bitcoin (BTC) Price Rally BlockchainWhile challenges remain, the successful completion of these experiments suggests that digital currencies could play a crucial role in shaping the future of finance. 3 Distributed Ledger for Securities Settlement System Experimenting settlement of French government bonds in 3 Central Bank Digital Currency with blockchain technology In March 2025 the French Central bank, Banque de France, launched a wholesale Central Bank Digital Currency ( CBDC ) experiment program to test the integrationKey takeaways include the importance of the DL3S platform, the benefits of DVP, and the potential for CBDCs to enhance financial inclusion and transparency. The new CBDC test is part of an experimental CBDC program launched in March 2025. Please note, this is a STATIC archive of website cointelegraph.com from October 2025, cach3.com does not collect or store any user information, there is no phishing involved.The Banque de France's commitment to innovation positions it as a leader in the global exploration of central bank digital currencies.As technology evolves and regulations adapt, it's essential to stay informed about the advancements in digital finance and their potential impact on the financial landscape.Explore how you can prepare for the future of digital finance and its impact on your business or investment strategy by consulting with a financial advisor specializing in emerging technologies.