A consortium of securities services firms has announced the completion of a test project involving the use of central bank digital currency (CBDC) to settle French treasury bonds on a test blockchain.

The experiment, commissioned by French central bank Banque de France, has been heralded by its participants as a step forward for the development of tokenised securities and evidence that a blockchain platform can coexist with existing market infrastructure.

The consortium involved central securities depositary Euroclear as well as a number of French banks including BNP Paribas, Credit Agricole, HSBC and Societe Generale.

The project is part of a wider initiative launched by Banque de France in March 2020 to test the viability of CBDC as a settlement vehicle for tokenised assets.

According to Isabelle Delorme, deputy CEO of Euroclear Belgium, Euroclear France and Euroclear Nederland, the experiment enabled the participants to measure the degree to which the issuance of CBDC can offer “fast and secure settlement of tokenised securities”.

However, Delorme also conceded that there is still work to do before blockchain platforms become a mainstay in the securities settlement process.

“We are well aware that there are still challenges that need to be overcome before we can envisage the implementation of blockchain platforms in production as we continue to investigate all routes to drive efficiencies for our clients,” she added.

© 2021 fundsTech