BANK OF FRANCE LAUNCHES EXPERIMENT PROGRAM ON CENTRAL BANK DIGITAL CURRENCY

Last updated: June 20, 2025, 00:52 | Written by: Gavin Wood

The world of finance is rapidly evolving, and central banks are actively exploring the potential of digital currencies to modernize payment systems and maintain monetary sovereignty.The Bank of France (Banque de France) is at the forefront of this innovation, having officially launched an experiment program focused on integrating a Central Bank Digital Currency (CBDC).This initiative aims to test the practical applications of a digital euro, particularly for interbank settlements and the clearing of tokenized financial assets. Keywords: Banque de France, payment systems, currency, innovation, monetary sovereignty, international role of the euro, central bank money, crypto-assets. European monetary authorities are confronted with the emergence of digital payments which threatens the anchoring role of central bank money.This bold move reflects the growing global interest in CBDCs, with over 130 countries now actively engaged in research and pilot programs. 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 integration of CBDC in innovative procedures for the exchange and settlement of tokenised financial assets between financialThis exploration comes as digital payments are gaining more and more traction, so much so that they may threaten the position of central bank money.The insights gained from these experiments will contribute to a broader discussion within the Eurosystem, ultimately influencing the decision on whether to establish a CBDC for the Eurozone. Banque de France launched a program of experiments to test out potential central bank digital currency (CBDC) aimed for interbank settlements. Potential participants have been invited to submit their applications to experiment with the use of a digital euro.The Bank of France's initiative highlights the crucial role of central banks in shaping the future of digital finance and ensuring that innovation aligns with the needs of the economy and its citizens.

The Banque de France's CBDC Experiment Program: A Deep Dive

The Banque de France's CBDC experiment program is a multi-faceted initiative designed to explore the potential benefits and challenges of a digital euro.This program is not intended to be a long-term or large-scale application by the Banque de France itself.Instead, the experiments will inform the broader discussion within the Eurosystem about the feasibility and desirability of a CBDC. These experiments will act as a contribution by the Banque de France to a broader discussion within the Eurosystem, which will make any decision on whether to set up a CBDC. The tests are not intended to be continued on a long-term basis or applied on a wide scale by the Banque de France itself. The new CBDC project from the central bankThe program is structured around specific use cases and technological approaches, with a focus on:

Interbank Settlements: Streamlining and improving the efficiency of payments between financial institutions.
Tokenized Financial Assets: Exploring the use of a digital euro for clearing and settling transactions involving tokenized securities, bonds, and other assets.
Technological Innovation: Experimenting with various blockchain technologies and other innovative solutions for issuing, distributing, and managing a CBDC.

Why Interbank Settlements?

Interbank settlements are a crucial part of the financial system, ensuring that payments between banks are cleared and settled efficiently.A CBDC could potentially offer several advantages in this area, including:

Reduced Settlement Times: Faster and more efficient clearing and settlement processes.
Lower Transaction Costs: Reduced fees and expenses associated with interbank payments.
Increased Transparency: Greater visibility and traceability of transactions.
Enhanced Security: Improved security and reduced risk of fraud.

The experiments conducted by the Banque de France aim to assess these potential benefits and identify any challenges associated with implementing a CBDC for interbank settlements.

Exploring Tokenized Financial Assets

Tokenization is the process of representing real-world assets, such as securities, bonds, and commodities, as digital tokens on a blockchain.This technology has the potential to revolutionize financial markets by making them more accessible, efficient, and transparent.A CBDC could play a crucial role in the clearing and settlement of tokenized financial assets, providing a trusted and secure means of payment.

The Banque de France's experiments in this area focus on:

Issuance and Redemption of Tokenized Assets: Exploring how a digital euro could be used to issue and redeem tokenized assets.
Secondary Market Trading: Facilitating the trading of tokenized assets on secondary markets.
Cross-Border Transactions: Enabling seamless cross-border transactions involving tokenized assets.

These experiments aim to demonstrate the potential of a CBDC to support the growth and development of the tokenized asset market.

The Second Phase of CBDC Experiments

Following the initial round of experiments, the Banque de France launched a second phase, building upon the insights gained from the first phase.This phase involved conducting up to five additional experiments with a continued focus on wholesale CBDC applications.These experiments further explored the integration of CBDC in innovative procedures for the exchange and settlement of tokenized financial assets between financial institutions. According to a March 30 document, France s central bank is calling for applications to experiment with the use of a digital euro, aiming to explore the potential CBDC opportunities forThis iterative approach allows the Banque de France to refine its understanding of the technical and operational challenges associated with implementing a CBDC.

Project Mariana: A Cross-Border CBDC Collaboration

In addition to its domestic experiments, the Banque de France is also participating in international collaborations to explore the potential of CBDCs for cross-border payments. The Bank of France (Banque de France) is launching a program of experiments testing out a potential central bank digital currency (CBDC) aimed for interbank settlements. Potential participants are being invited to submit their applications, as the Bank of France is calling for applications to experiment with the use of a digital euro.One notable example is Project Mariana, a collaboration with the Bank for International Settlements (BIS) Innovation Hub, the Swiss National Bank, and the Monetary Authority of Singapore. The Banque de France has launched its second phase of central bank digital currency (CBDC) experiments. The central bank will conduct up to five additional experiments, after conducting nine over the past year, with a wholesale CBDC focus.Project Mariana aims to explore cross-border payments between financial institutions using hypothetical euro, Swiss franc, and Singapore dollar CBDCs.

A key component of Project Mariana is the development of an Automated Market Maker (AMM) to facilitate the settlement of foreign exchange trades involved in cross-border CBDC transactions. Commencement of Central Bank Digital Currency Experiments: Pilot Program In line with The Bank of Japan's Approach to Central Bank Digital Currency released in October 2025, the Bank of Japan has been conducting experiments on Central Bank Digital Currency (CBDC) since April 2025. The Bank will complete the Proof of Concepts (PoCs), throughAMMs are decentralized exchanges that use algorithms to automatically determine the price of assets and facilitate trades.By using an AMM, Project Mariana aims to demonstrate the potential of CBDCs to reduce the costs and complexities of cross-border payments.

The Geopolitical Implications of CBDCs

The development and adoption of CBDCs have significant geopolitical implications. The Bank of France is now officially launching a program of experiments to test the integration of a CBDC for Bank of France Launches Experiment Program on Central Bank Digital Currency - Currency InsiderAs digital currencies gain prominence, they could potentially reshape the global financial landscape and challenge the dominance of traditional reserve currencies.Countries that are early adopters of CBDCs could gain a competitive advantage in international trade and finance. A division of the Federal Reserve Bank of New York has concluded a monthslong test on the viability of a digital dollar, according to Bloomberg.The experiment, carried out at the Fed s New York Innovation Center, focused on a technology called a regulated liability network, which allows banks to issue digital money representing their customers funds.However, the design choices made in implementing CBDCs will significantly impact their influence.

Design Choices Matter

The design of a CBDC can influence its adoption and impact.Key design considerations include:

Privacy: Balancing the need for privacy with the need to prevent illicit activities.
Accessibility: Ensuring that the CBDC is accessible to all citizens, including those who are unbanked or underbanked.
Interoperability: Ensuring that the CBDC can interoperate with other payment systems, both domestic and international.
Security: Protecting the CBDC from cyberattacks and other security threats.

The choices made in these areas will determine the extent to which a CBDC can achieve its goals and shape the future of digital finance.

The United States and the Future of CBDCs

While countries like France are actively exploring CBDCs, the United States has taken a more cautious approach. See full list on cointelegraph.comHowever, the Federal Reserve has been conducting research and experiments on digital currencies, including a project at the Fed’s New York Innovation Center that focused on a technology called a regulated liability network. A CBDC is a digital form of central bank money that is widely available to the general public. Central bank money refers to money that is a liability of the central bank. In the United States, there are currently two types of central bank money: physical currency issued by the Federal Reserve and digital balances held by commercial banks atThis network allows banks to issue digital money representing their customers' funds.The future of the US approach remains uncertain, but the ongoing explorations suggest a recognition of the need to understand the potential impact of CBDCs. Digital currencies Ap Print this page Design choices of Central Bank Digital Currencies will transform digital payments and geopolitics. By Nikhil Raghuveera. In this analysis, the Atlantic Council GeoTech Center examines the geopolitical implications of Central Bank Digital Currencies (CBDCs) and calls for the United States to lead on setting standards for CBDC and financialLeading on setting standards for CBDC and financial technologies could allow for better outcomes in digital currency markets.

The Role of Central Banks in the Digital Age

The emergence of digital currencies presents both opportunities and challenges for central banks. Bank of France Launches Experiment Program on Central Bank Digital CurrencyOn one hand, CBDCs could offer several benefits, including:

Improved Payment Efficiency: Faster, cheaper, and more efficient payment systems.
Financial Inclusion: Greater access to financial services for underserved populations.
Monetary Policy Effectiveness: Enhanced ability to implement monetary policy.
Reduced Risk of Illicit Activities: Improved monitoring and detection of illicit financial flows.

On the other hand, CBDCs also pose potential risks, including:

Disintermediation of Banks: Potential for CBDCs to reduce the role of commercial banks in the financial system.
Cybersecurity Risks: Vulnerability to cyberattacks and other security threats.
Privacy Concerns: Potential for government surveillance of financial transactions.
Impact on Monetary Sovereignty: Potential for CBDCs to be used for political or economic coercion.

Central banks must carefully weigh these benefits and risks as they consider the future of digital currencies.In doing so, the Eurosystem and Banque de France consider concerns related to monetary sovereignty, international role of the euro, and payment systems within their broader strategies.

Global Landscape: CBDC Adoption and Progress

The global landscape of CBDC adoption is diverse, with varying levels of progress across different countries. The BIS Innovation Hub launches Mariana, a new project to explore cross-border payments between financial institutions using hypothetical euro, Swiss franc and Singapore dollar CBDCs. As part of the experiment, an automated market maker (AMM) will be further developed to settle foreign exchange trades involved.As of March 2025, over 130 countries were actively engaged in CBDC research, with 3 countries, territories, or currency unions having launched CBDCs and 36 implementing pilot programs. A Central Bank Digital Currency (CBDC) is the digital form of a country s fiat currency that is also a claim on the central bank. Instead of printing money, the central bank issues electronic coins or accounts backed by the full faith and credit of the government.This highlights the growing interest in CBDCs as a potential solution for modernizing payment systems and enhancing financial inclusion.

India, for example, has emerged as a world leader in digital payments, driven by the widespread adoption of the Unified Payments Interface (UPI).While not a CBDC, UPI demonstrates the potential of digital payment systems to transform economies. Over the last decade, India has established itself as a world leader in digital payments, accounting for 49% of global real-time digital transactions. 1 India s prominence in digital payments has predominantly stemmed from its success in widespread adoption of the Unified Payments Interface ( UPI ) an instant real-time payment system enabling users to transfer funds between bankOther countries are experimenting with various CBDC designs and technologies to address their specific needs and challenges. France s central bank is calling for applications to experiment with the use of a digital euro, aiming to explore the potential CBDC opportunities for clearing and settlement of tokenized financial assets.According to a survey conducted by the Bank for International Settlements (BIS) in 2025, there have been more than 60 central banks exploring the potential of CBDC since 2025, in which 86% are actively engaged in CBDC research, 60% are conducting experiments or proofs of concept.

Frequently Asked Questions About CBDCs

What is a Central Bank Digital Currency (CBDC)?

A CBDC is the digital form of a country's fiat currency, issued and backed by the central bank.It is a liability of the central bank and is intended to be widely available to the general public.Unlike cryptocurrencies, which are decentralized and not backed by any government or central bank, a CBDC is a digital representation of a country's official currency.

How is a CBDC different from existing digital payment systems?

While digital payment systems like credit cards and mobile payment apps are widely used, they rely on commercial banks and other intermediaries to process transactions. The recent history of central bank digital currencies (CBDCs) has been marked by continuous exploration and development.By March 2025, over 130 countries were actively engaged in CBDC research with 3 countries, territories or currency unions having launched CBDCs, and 36 implementing pilot programs.A CBDC, on the other hand, would be a direct liability of the central bank, potentially eliminating the need for intermediaries and reducing transaction costs.Additionally, a CBDC could provide greater financial inclusion by allowing individuals without bank accounts to access digital payment services.

What are the potential benefits of a CBDC?

A CBDC could offer several benefits, including:

Improved Payment Efficiency: Faster and cheaper payments, especially for cross-border transactions.
Financial Inclusion: Access to financial services for unbanked and underbanked populations.
Reduced Risk of Illicit Activities: Improved monitoring and detection of illicit financial flows.
Enhanced Monetary Policy Implementation: Greater control over the money supply and interest rates.

What are the potential risks of a CBDC?

A CBDC also poses potential risks, including:

Disintermediation of Banks: Potential for CBDCs to reduce the role of commercial banks in the financial system.
Cybersecurity Risks: Vulnerability to cyberattacks and other security threats.
Privacy Concerns: Potential for government surveillance of financial transactions.
Financial Instability: The potential for rapid shifts of funds from commercial banks to the central bank during times of crisis.

Conclusion: The Future of Finance is Digital

The Bank of France's experiment program on Central Bank Digital Currency signifies a crucial step towards embracing the future of finance. A review of CBDC design choices in various countries. Central bank interest in CBDCs has grown rapidly in the Covid-19 pandemic era. 12 According to a survey on CBDC conducted by the Bank for International Settlements (BIS) in 2025, there have been more than 60 central banks exploring the potential of CBDC since 2025, in which 86% are actively engaged in CBDC research, 60% are conductingThese experiments, along with Project Mariana, are intended to inform broader discussion within the Eurosystem.The initiative underscores the importance of innovation, monetary sovereignty, and the international role of the euro in an increasingly digital world.As central banks worldwide explore CBDCs, the design choices they make will have far-reaching implications for payment systems, geopolitics, and the financial well-being of citizens.The insights gained from these explorations will shape the evolution of digital finance and determine the extent to which CBDCs can deliver on their potential benefits while mitigating the associated risks.The journey towards a digital future of finance is underway, and the Bank of France is actively contributing to its direction.