The Bank of France wants to investigate the specifics of a central bank digital currency (CBDC) for wholesale use, Bloomberg reported.
A CBDC could help standards for securities settlements and minimize possible fragmenting from multiple private versions existing, the bank found, per the report. A CBDC could also speed up cross-border payments and make them less expensive and more transparent as well as allow more people to access them overall.
Regulators have been looking into CBDCs in the effort to keep up with the rapid-fire developments of crypto-assets and digital payments, according to the report. Some governments have been worried about the sovereignty over money and payments as more digital assets rise up. As a result, central banks have been looking into ways to anchor financial systems.
The European Central Bank has been researching a digital euro for retail over the last two years. France’s wholesale version is still in the very early stages, the report stated. The Bank of France said there is still more work to do to see how monetary policy and the economy would be affected by issuing a CBDC to intermediaries. It also said central banks should examine how the tech for such a project works with energy and scalability.
In other CBDC news, Nigeria debuted its own CBDC in October ahead of many other world powers. However, the rollout of its eNaira might end up being imperiled by mistrust of the government.
More than half of Nigerians don’t have a formal bank account. Additionally, the Nigerian government froze accounts of those participating in anti-police brutality protests last year, which did nothing to help government trust.
“The eNaira actually makes it even easier if the government wants to shut down someone’s account … or even the whole system,” said Ronak Gadhia, analyst for EFG Hermes.