France’s largest banks prepare tokenized deposit consortium

Unlike stablecoins, tokenized deposits are a form of onchain bank money that benefit from the same features as traditional deposits, including deposit protection schemes, interest accrual, and the preservation of fractional-reserve banking dynamics.

“To date, no one has yet found the magic design that would allow banks to benefit from the innovation of stablecoins while fully preserving the advantages of traditional bank deposits, such as the fractional-reserve system. That is precisely what is at stake here,” explained a source close to the matter.

As of now, the members include: BNP Paribas, Société Générale, Crédit Agricole and BPCE Group. The project remains at an early stage for now, and no pilot or launch date has been communicated at this stage.

A few key details:

. Closed-loop system: The tokens will circulate only between wallets held at participating banks.

. Only permissioned blockchains: This structure is also reflected in the current technology considerations, with the consortium leaning toward private or public permissioned blockchains.

. Token exchange standard: A key open question is how participating banks authorize transfers between each other. Two models are under consideration: a TARGET2-style multilateral framework with a single harmonized rulebook for all members, or a SWIFT RMA-inspired approach based on bilateral technical authorizations between institutions.

So far, France’s major banks have been slower to engage in onchain commercial cash initiatives, with only a few scattered efforts emerging → Société Générale, through SG-FORGE, and the smaller private bank ODDO BHF have stood out as early movers.

But momentum has picked up in recent months.

Notably, following remarks by François Villeroy de Galhau, Governor of the Banque de France, in October, as well as the growing number of experiments in Switzerland and the U.S., particularly JPMD by JPMorgan, and Germany’s Commercial Bank Money Token (CBMT) consortium, which brings together Deutsche Bank, Commerzbank, and DZ Bank.

Since then:

. BNP Paribas and Crédit Agricole have joined FARO, an international banking consortium.

. BNP Paribas has also joined Qivalis, and according to our information, other banks such as BPCE are seriously considering following.

“Finally, momentum is starting to build,” another source explained.

This story was part of the Blockstories Institutional Briefing, weekly newsletter for banks and asset managers, read by more than 15,000 professionals and published every Thursday.