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French Central Bank Announces Preliminary Blockchain Testing

Banque de France, the French central bank, has announced it is undergoing initial tests into the feasibility of implementing blockchain technology, for more cost-effective, risk-controlled transacting and credit control, with the potential for implications throughout the Single Euro Payments Area.

The central bank has said it hopes the tests could be used in managing SEPA credit identifiers, markers that confirm the identity of creditors for smoother credit management. The move is the first step by the central bank toward identifying uses for blockchain technology, which many analysts expect to radically overhaul the future of payment settlement and financial services more broadly.

The bank is already at the stage of having run successful tests on its pilot program, with companies such as Labo Blockchain, and government investment body Caisse des Dépôts et Consignations among those who have participated in these early tests.

The move from the French central bank sees them catch up with other central banks around the world, including in Singapore and Sweden. The Bank of Japan has also been involved in some exploratory work relating to blockchain technologies, as central banks across the globe become increasingly aware of the opportunities available through further developments to these technologies.

The test, which ran from July to October, saw the bank putting its money where its mouth is, following on from its calls earlier in the year for more robust research into practical applications of the blockchain and distributed ledger technology in financial industries. While the bank pointed out that research should target both the pros and cons of implementation, its own trials appear to have been successful, and could pave the way for significantly enhanced collaboration between businesses and public-sector organizations in the near future.

The Federal Reserve in the U.S. has also now joined the cause, publishing its own research into applications for the blockchain earlier in December. It seems as though the technology, which is now benefiting from significant resources and research efforts worldwide, could be several steps closer to practical implementation throughout the global financial sector.

A spokesperson for the French central bank suggested that the trials could help advance the development of the blockchain toward a feasible infrastructure for commercial use.

“This experience allows all the participating banks to share their analyses of the impacts and opportunities of this technology.”