24 Arp 2020
As the digital Euro finds its way into France's financial sector, how will the
cryptocurrency industry respond to this addition, and what effect will it have
on France's CBDC?
Could blockchain be the answer? The CEO of Ledger, the hardware wallet manufacturer firm, Pascal Gauthier stated that excluding blockchain could prove unwise in an effort to breathe new life into the decrepit banking system. Gauthier added that, in order to remain relevant, anonymity must not be sacrificed in any new system, and that the way to accomplish that might lie in blockchain technology. He further stated:
“There is no benefit if it remains a simple digital currency. Although, if it runs on a public blockchain there will be two main benefits, one for citizens, they will own their private keys so they will be their own bankers, the other for governments who can program the public blockchain to track the money in order to check if it has been sent and used properly, but it must absolutely remain anonymous.”
However, it seems that blockchain remains unacceptable for the Bank of France, but it might be that it merely wishes to remain neutral when the choice of available technology is made. Still, as the founder of Trustology, a specialist wallet-custody firm, Alex Baitlin believes that, in the sea of similar technological solutions, the best choice currently seems to be the blockchain:
“If the Banque de France was focused on money transfers exclusively then alternate technology such as hashgraph could be tapped into. But this is not the case, it's specific to interbank settlement which suggests the need for immutability of records, transparency and real-time. Thus, in this case blockchain becomes the better fit here.”
The central bank of Sweden designed a CBDC pilot very early, but it opted against blockchain, implying that it didn't have sufficient testing. As they turned around recently, the CBDC test of the Sveriges Riksbank is well underway, dubbed e-krona. According to the bank, distributed ledger technology (DLT) is being used, with blockchain being one form of DLT.
France might as well be implementing DLT for its own CBDC test. Then again, as it still is the right-ish path to decentralized fin-tech, it's almost a general concensus that blockchain is superior to any other type of DLT. “It’s like apples and oranges,” as founder of Hedgetrade - a Europe-based trading platform, David Walsen remarks, further stating: “A CBDC such as the e-krona will have strict permissions and requirements to participate.”