The French Central Bank announced Tuesday that it will proceed with the second phase of its experiment with a digital euro, with the goal of launching the cryptocurrency next year. The Banque de France completed the first stage of its experiment with a Central Bank Digital Currency last year.
"We'd like to get to a viable prototype, test it in practice with more private actors and more central banks in the second half of this year and next year," Banque de France chief Francois Villeroy de Galhau told a conference.
The goal was to introduce a digital euro "as a means of settlement in 2023", he said. While central bank digital currencies share much of the technology underpinning cryptocurrencies like bitcoin, there are significant differences.
A central bank digital currency is the digital equivalent of the official currency, and its value does not fluctuate in relation to it. The majority of cryptocurrencies are decentralised and provide transaction anonymity, whereas a central bank digital currency is centralised and regulated, and the parties to transactions are known. The use of a central bank digital currency can also be restricted to bank settlement or to the general public.