French central bank urges further blockchain research

Rage Commentary : The Financial Stability Board (FSB) is composed of central bank governors and government officials from G20 countries, including many countries in Asia, Africa, Europe, and America. The agency cooperates with the Bank of France to conduct research on blockchain technology. The Bank of France's report on financial stability in the digital age revealed the FSB and its close cooperation in the field of blockchain, saying that the technology can transform the traditional settlement model, but its specific impact has yet to be discovered. In addition, although the current daily trading volume of digital currencies is far lower than that of the euro, the report still calls on central bank governors to pay close attention to digital currency transactions.

Translation: Annie_Xu

The Bank of France released a report on financial stability in the digital age, which mentioned virtual currency and blockchain technology many times.

The report noted that the Banque de France is working with the Financial Stability Board (FSB) to conduct blockchain-related research. The FSB, a body of central bank governors and government officials from the G20 countries, conducted a number of related field studies in February and recently explored the technology from the perspective of financial innovation.

Based on a general understanding of the Bank of France report:

“Both the Banque de France and the Financial Stability Board are closely following the developments surrounding blockchain technology, its potential areas of application and the issues it raises, especially security.

The report also highlights the ways in which the technology is reshaping the way markets operate.

“This distributed ledger model can replace the traditional centralized settlement process of clearing houses, affecting collateral management equipment or property record rules.”

At the same time, the report’s authors argue that the technology is “still largely experimental”; future trials should assess blockchain’s “security, cost, ability to process large transaction volumes quickly, and the economic benefits of not having to involve a trusted third party.”

Digital currency related work

In addition to exploring blockchain applications, the Bank of France said it is also conducting research on digital currencies such as Bitcoin, including a statement to investors in 2013 and cooperation with the FSB in related fields.

The report elaborates on the relevant policy details and recommends that central bank governors pay attention to the digital currency and legal currency exchange activities carried out by Bitcoin exchanges.

The report also focuses on digital currency transaction volume data in the European Union, comparing it to the circulation of euros on the same day.

"But the use of virtual currencies is still very low: the daily transaction volume of virtual currencies is less than 200,000, and the total transaction amount is less than 100 million euros; while the daily transaction volume of euros in EU countries is as high as 250 million, with a total amount of 70 billion euros."