The global digital currency race has been rapidly picking up speed in the latter half of 2019 with the Banque De France, France’s central bank, announcing plans to test a digital currency as early as the first quarter of 2020.
Reports suggest that Libra and China's moves towards a Central Bank Digital Currency (CBDC) have pressured the French government into accelerating plans for launch.
Central bank’s Governor Francois Villeroy de Galhau says the creation of a CBDC is a crucial focus, saying:
We want to start running experiments rapidly and will launch a call for projects before the end of the first quarter of 2020.
Speaking on Wednesday at a finance conference in Paris, Villeroy said that he was eager to support the use of a CBDC to exchange and settle tokenized financial assets between financial companies. he also said:
We have to make our contribution to this innovation, but in a serious and methodical way…I see an advantage in quickly moving forward to issue at least a wholesale central bank digital currency in order to be the leading issuer in the world and thus reap the benefits of having a benchmark CBDC.
(our emphasis)
France’s central bank has advertised for an experienced crypto-economics analyst with a solid knowledge of game theory and public or private blockchain as well as a development engineer, to work on the bank’s digital strategy and identify blockchain applications for key banking functions.
The advertisement states that:
The trainee will be tasked with learning one or more of these technologies (Ethereum, Quorum, Hyperledger, Corda, etc.) in order to understand the foundations of decentralized treatments and apply them to create prototypes.
Experiments are to be carried out involving interbanking services, payments, post-market securities/cash processing as well as other central banking activities that could benefit from blockchain.
France have joined an increasing list of countries, including the US, Canada and China, which are experimenting with digital currencies. Unfortunately Australia remains absent from that list.
Last month, Federal Reserve Chairman Jerome Powell responded to lawmakers who urged him to consider issuing a digital US dollar. Despite ongoing calls to move forcefully and rapidly to gain a first-mover advantage, the Chairman confirmed that the US is exploring the option but not developing any technology.
Australia's position is similar, with Head of Payments Policy Department for the Reserve Bank of Australia, Tony Richards, saying that although bitcoin and many other cryptocurrencies were impressive and admirable, limited usage within Australia made it unnecessary to issue a new digital version of the Australian Dollar.
However, these moves in France and especially China increasingly show that the "horse and carts are just fine thank you" approach to digital currencies is not a sustainable position, the faster a deep integration of blockchain occurs into the real economy, the sooner we will reap the benefits of this new technology.
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