French bank Société Générale will use Tezos (XTZ) to test the French CBDC. This is the first major test of a central bank’s digital currency in Europe. France’s central bank is pushing hard for the republic to be the first European country to have a state-supported virtual currency.
CBDC on the Tezos blockchain
On September 15, Nomadic Labs, the research and development organization for Tezos, announced that it would lead French CBDC tests based on the XTZ blockchain. The experiments will be conducted in cooperation with Société Générale Forge – a branch of the third largest bank in France.
– Nomadic Labs (@LabosNomades) September 15, 2020
Nomadic Labs will not work alone. Forge is a banking start-up dedicated to digital currencies and blockchain technology. Nomadic Labs stated:
“A group of technology vendors and advisors – including Nomadic Labs (one of the largest research and development centers in the Tezos ecosystem) – will participate in the project, contributing to technological development.”
Why Tezos (XTZ)?
Tezos is not a random cryptocurrency. At the time of writing this article, its market capitalization is nearly $ 2 billion. The platform uses the Proof-of-Stake consensus algorithm, supports smart contracts, and is to some extent community managed. The French CBDC intends to use these opportunities to improve interbank settlements.
The Tezos project, however, is not clean as a whistle and has previously been the subject of controversy. In August, he settled with ICO investors who lost money and paid them $ 25 billion in damages.
The Banque de France revealed earlier this month that is going to test CBDC and is keeping an eye on several candidates including Nomadic Labs and Tezos.
In December 2019, central bank governor François Villeroy de Galhau stated that France wanted to be a leader in research on central bank digital currencies. He then mentioned the need for easy international payments within the European Community.
On May 14, 2020, Société Générale – Forge settled a banking transaction for the first time using digital currency. Looking further back, however, it seems that the bank has been interested in Tezos for a long time. According Elorpar’s post on reddit, Société Générale’s Twitter profile, has been following the project for at least two years.