The governor of the Bank of France, Francois Villeroy de Galhau mentioned interesting details in his speech. He attended the Bundesbank conference on September 11. According to the governor, Europe can’t afford to lose momentum. Especially when it comes to dealing with the challenges posed by the private sector global digital assets. In his speech, he also talked about the big tech companies.
His warning comes at a time when five European Union (EU) governments, Germany, France, Spain, Italy, and the Netherlands all supported the European Commission’s intent to draft regulation for asset-backed crypto assets, notably stablecoins.
Importantly, in their draft joint statement, the governments reportedly promised to prevent global stablecoins from operating in the EU. They want the EU to address all legal, regulatory, and oversight matters. Only after that, they are ready to grant permission. Notably, the commission is expected to present its proposals for regulating crypto assets later this month.
Tech companies and main challenges
According to the governor of the Bank of France, the biggest risk is that big tech companies will use their global market penetration. As a result, they will be able to build private financial infrastructures and monetary systems. Also, they will compete with public monetary sovereignty. This is because they will position themselves as issuers and managers of a universal currency.
He said the articulation of private multiple central bank digital currencies (CBDC) with private sector initiatives would undermine input from other central banks.
According to Francois Villeroy de Galhau, the European Central Bank and the Eurosystem can’t allow itself leg behind on a CBDC.
Importantly, a European CBDC could consist of both retail as well as the wholesale version for financial institutions. Moreover, he did not forget to mention that there is no contradiction between considering a euro-CBDC and supporting European Payments Initiative.
Central banks in Europe should pay more attention to the challenges mentioned in his speech