Central Bank Digital Currencies
French CBDC Shows Promising Results while Canada Remains Unconvinced- CBDCs Weekly

France Continues CBDC Trial
Results from a CBDC trial which began nearly a year ago involving both Euroclear and Banque de France have recently been shared. This was a multi-purpose trial, focused on the various use cases of CBDCs, and their viability as a means for trade settlements. While quite extensive, the research aimed to answer three main questions.
- Can a comprehensive range of CSD functionalities be run on blockchain?
- Do blockchain and CBDCs add value to capital markets?
- What are the major challenges in implementing such technology?
Euroclear, the company spearheading this research, concluded that, “Our CBDC experiment indicated that Blockchain can be a suitable technology for the management of post trade market operations. It showed that CBDC can be effectively used to support the settlement of securities in central bank money and that it is possible to run post trade operations for an activity as critical for the capital markets as the management of OATs”
Canada Not Convinced
Despite being one of the more forward thinking and accepting nations towards digital assets, Canadian officials are not convinced that the ‘Great White North’ needs its own CBDC. There simply has not been enough of the Canadian population demonstrating a shift away from paper FIAT.
In a recent discussion, Timothy Lane, Deputy Governor at Bank of Canada, stated, “We haven't made a decision to issue one yet because we basically don't see a compelling need under current circumstances…One would have to think seriously about whether a digital equivalent to cash would perform a valuable role in financial inclusion.”
Interestingly, Lane shared a contrarian viewpoint to one often linked with CBDCs. While most believe that digital assets can promote financial inclusion, Lane believes that launching a CBDC in a nation not yet ready may do the exact opposite, and isolate areas of the population. He believes that a CBDC, “…could leave some households out in the cold, in effect impair their ability to participate fully in the economy. One would have to think seriously about whether a digital equivalent to cash would perform a valuable role in financial inclusion.”
Offline Usage Required
As stated, digital assets in their various forms have oft been touted as a means of promoting financial inclusion. There are various hurdles which must be cleared for this to truly be the case though. With regards to CBDCs, how can financial inclusion be promoted if the full population doesn’t have access to the internet? One country which is in the midst of developing its own CBDC (Ghana) feels as though it may have the answer – ‘smart cards’.
Smart cards will allow for users to access their funds even when ‘offline’. These cards, which utilize built-in chips do not come free of caveats. By incorporating them, complications such as double-spending begin to rear their head. While such issues may arise, it is reasonable to assume that these will be addressed in Ghana’s pending CBDC pilot.