Euroclear, BNP Paribas and Societe Generale involved in CBDC settlement experiment with French central bank

The experiment focused on the entire life cycle of securities, from issuance and registration in the blockchain to secondary market operations’ settlement.

By Wesley Bray

FinTech firm LiquidShare in partnership with a consortium of organisations including BNP Paribas Securities Services, Euroclear and Société Générale Securities Services, has successfully completed an experiment in the use of central bank digital currency (CBDC) for interbank settlement purposes.

The group of organisations formed around LiquidShare covered two use cases: delivery versus payment for both listed and non-listed securities on blockchain.

The tests focused on the entire life cycle of securities, from issuance and registration in the blockchain to secondary market operations’ settlement.

The tests allowed all processes throughout the day to be validated with the functions of creation, control and destruction of CBDC tokens vested to the Banque de France, among others.

All operations are said to have been carried out in strict line with the expected deadlines and scenarios.

Overall, 15 entities and over 45 participants represented the entire ecosystem. This included investors, Euronext as marketplace, Euroclear France as central securities depository, brokers, custodians, retail and institutional clients.

These entities and participants interacted over two days and were able to validate the benefits offered by the blockchain, including access to the same source of information, real-time information sharing and modelisation of business logic due to smart contracts.

It was also concluded that the success of the experiment best prepares the development of post-market solutions for digital assets, securities or cash.

“We are delighted to have been able to demonstrate with the Banque de France and all our partners our ability to appropriate new technologies and to have all market infrastructures work together. This is a new demonstration of the Place de Paris players’ capacity to mobilise and cooperate for an innovative project in close collaboration with the authorities and infrastructures,” said Jean-Marc Eyssautier, CEO of LiquidShare.

The experiment is the latest by the French central bank as it continues to explore the use of CBDCs for crucial functions within financial markets.

Earlier this month, it was announced that Euroclear and a consortium of banks conducted a successful test with the Banque de France using CBDC to settle the issuance of a French government bond.

Additionally, in January, the Banque de France completed a CBDC transaction in collaboration with Citi, CACEIS, Groupama Asset Management, OFI Asset Management and DXC Technology. The CBDC tokens were used to subscribe to a fund and represented the world’s first successful live settlement of a fund using CBDC tokens.