Banking Giant Société Générale will use Tezos to test a Central Banking Digital Currency (CBDC) for France.
This is the first significant test of a CBDC in Europe. France’s central bank has been pushing for the republic to be Europe’s first country with such a currency.
In a press release on Tuesday morning, 15 Sep., Nomadic Labs, a Tezos research and development organization, announced it would be heading CBDC experiments based on the Tezos blockchain. This will be in conjunction with Société Générale – Forge, a subsidiary of France’s third-largest bank.
Nomadic Labs will not be working alone. Forge is a startup with the bank, dedicated to blockchain and digital currencies. The collaboration will involve several entities, however. Nomadic Labs said:
A pool of technology providers and advisors — which includes Nomadic Labs (one of the largest research and development centers in the Tezos ecosystem) — will participate in the project, contributing to its technological expertise.
Tezos is no lightweight. At the time of writing, its market cap stood at almost $2 billion. The platform uses Proof-of-Stake, has smart contracts, and allows for some community governance. The French CBDC will focus on settling accounts between banks and will likely capitalize on these capabilities.
Nevertheless, the Tezos project is not without controversy. In August, it conceded a $25 million settlement to early ICO investors who lost money.
A Long Time Coming?
Earlier this month, the Banque de France revealed it was going to test a CBDC and had candidates including Nomadic Labs and Tezos in mind. In December 2019, the François Villeroy de Galhau, governor of the central bank, reiterated a desire to be at the forefront of CBDC research.
He cited the need for easy international payments within the European Community. The Nomadic Labs announcement now makes it official.
On May 14, 2020, Société Générale – Forge settled a bank transaction using digital currency for the first time. Going even further back, however, it seems Société Générale has had its eyes on Tezos for some time.
According to a Reddit post by user Elorpar, Société Générale’s Twitter has been following Tezos for at least two years.
The Bank of England also recently announced they are mulling over how to use stablecoins and blockchain to create a CBDC. Central banks are likely to hasten blockchain research.