Societe Generale tests digital euro with Banque de France

Written by Ruby Hinchliffe
22nd May 2020

Societe Generale and France’s central bank, Banque de France, have tested the settlement of a transaction using a central bank digital currency (CBDC) on the blockchain.

Earlier this month, Societe Generale issued €40 million of covered bonds as security tokens directly registered on a public blockchain. The bank simultaneously paid the issuer with digital euros issued by Banque de France through a blockchain platform.

“It demonstrates the feasibility of financial securities being digitally settled and delivered in CBDC for interbank settlements,” Societe Generale said in a statement.

The bank says it wants to shorten payment processes through a more simplified market infrastructure

The bank says the test transaction with the Banque de France is “a new step” in the “scaling up” of its technology transformation, and “seals a new stage” in the development of its ‘Forge’ platform which is designed to promote new blockchain-based market activities.

It follows in the footsteps of an initial issue worth €100 million in security tokens which the bank completed back in April 2019 and settled with traditional euros.

Looking ahead, the bank hopes these tests will pave the way for automation and the shortening of payment processes through a more simplified market infrastructure.

Earlier this week, Billon, a UK and Poland-based fintech which stores and transfers regulated currencies using a proprietary blockchain, partnered with Austria’s Raiffeisen Bank International (RBI) to pilot a national currency ‘Tokenisation Platform’.

If the pilot is successful, the project “could be deployed in Central Eastern European (CEE) countries where RBI operates”, according to the Austrian bank.

Whilst Societe Generale’s tests are working in tandem with the central bank, RBI has decided to partner with a fintech and work on a private national alternative.