France and Luxembourg join the Venus initiative to use CBDC for bond settlement

The Banque centrale de France and the Banque centrale du Luxembourg have joined forces to deploy the “Venus Initiative”.Venus Initiative“, which allows them to use an experimental CBDC for a €100 million bond. Worth $104 million, the bond is the latest vehicle employed in a series of trials in tokenized financial markets.

In addition to the central banks of France and Luxembourg, the Venus initiative involved Goldman Sachs, Santander, Société Générale and the European Investment Bank (EIB). The EIB appointed Goldman Sachs Bank Europe SE, Santander and Société Générale to issue and distribute the native digital bonds.

The central banks of France and Luxembourg at the initiative of Venus

The director general of financial stability and operations at the Banque de France, Nathalie Aufauvre, had something to say about the project. He said that the Venus initiative had brought together the central banks of France and Luxembourg. He further explained:

“It shows how digital assets can be issued, distributed and settled within the eurozone, in a single day. The Venus initiative confirms that a well-designed CBDC can play a key role in the development of a secure space for tokenized financial assets in Europe. It also aims to contribute to the Eurosystem’s reflections on how to improve our services to the wholesale market, especially in the context of the upcoming DLP Pilot Regime adopted by the European Union.”

Meanwhile, the French central bank has conducted a series of CBDC tests to manage liquidity in decentralized finance. The bank is also working on the use of central bank digital currency in the settlement of cross-border transactions. In September, financial institutions unveiled new plans to leverage the use of CBDCs at the wholesale level. Bank governor Villeroy de Galhau said that a wholesale CBDC would help with cross-border and cross-currency payments. He also revealed that the European Central Bank is considering issuing a digital euro as early as 2026.

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More on the Venus Project

In the latest announcement on the collaboration between France and Luxembourg on the Venus Project, it was revealed that both institutions are proposing cross-border regulations. Gaston Reinesch noted:

“With the innovative EIB issue under Luxembourg law, the Banque de France and the Banque centrale du Luxembourg are proposing a possible cross-border response to the growing market interest in effecting digital native securities settlements with a central bank money token.”

In the U.S., the Federal Reserve Bank of New York has announced plans to launch a 12-week proof-of-concept pilot project. The program is designed to involve major commercial banks such as BNY Mellon, Citi and others. The goal is to conduct advanced research on “Asset tokenization and the future of financial market infrastructure in the United States as money and banking evolve.“.

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