Exclusive: France’s Largest Banks Team Up For Tokenized Deposit System

French connection: According to our information, France’s largest banking groups are preparing to form a tokenized deposit system. As of now, the members include:

• BNP Paribas

• Société Générale

• Crédit Agricole

• BPCE Group

Why it matters: So far, France’s major banks have been slower to engage in onchain cash initiatives. Société Générale via SG-FORGE and the smaller private bank ODDO BHF have stood out as early participants.

• “Only in recent months have institutions such as BPCE and Crédit Agricole started to define concrete strategies to move forward internally. There’s a growing sense of urgency, particularly as Germany moves ahead with initiatives like the CBMT consortium, which brings together Commerzbank, DZ Bank, and Deutsche Bank,” a French banker told Blockstories.

Preserving banking advantage: 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.

Here’s what our sources tell us about the initiative:

• Closed-loop system: As with most similar initiatives, 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 members leaning toward private or public permissioned blockchains.

• Native onchain recording: To realize the efficiencies of a single shared ledger, the consortium intends to record transactions exclusively on DLT, avoiding any parallel or duplicative systems.

• 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.

Outlook: Even though a framework has been established between the participating banks, several legal and technical details remain to be defined. No launch date has been set at this stage.