Faced with the risks for their monetary issuance, the major central bankers in Europe are beginning to worry about stablecoins. Whether at the Banque de France or the European Central Bank, this type of cryptocurrency is already portrayed as a danger to the economy.
The Banque de France urgently wants a digital euro
In a statement released on September 11, François Villeroy de Galhau, Governor of the Banque de France, encourages European bankers to quickly prepare for the era of digital payments :
“…we in Europe face urgent and strategic choices on payments that will have implications for our financial sovereignty for decades to come. I see it as a “strategic square”, the four parts of the system to be solved for delivering a European strategy: i) Cross border payments shortcomings, ii) BigTech’s global projects in the financial sector (including stablecoins), iii) The developing European Payment Initiative and iv) The potential Central Bank Digital Currency (CBDC).”
His concern is particularly focused on “Big Techs” stablecoin projects, such as Facebook and its Libra project. These giants could quite easily set up “private monetary systems”, which would compete directly with the currencies of central banks.
This is where the urgency comes from to issue, in a coordinated manner, a central bank digital currency (CBDC) on a European scale for Villeroy de Galhau. The banker even insists heavily:
“Let me be clear! We cannot afford to be left behind when it comes to [issuing]CBDC. ”
We already wrote in the past about France working on the digital euro.
Christine Lagarde is also pushing for the creation of a European CBDC
At the same conference, the President of the European Central Bank (ECB), Christine Lagarde, also criticized Europe’s “delay” in this global “competition” to issue an CBDC.
Conversely, the introduction of a digital euro would allow the Eurosystem “to be at the forefront of innovation” . This is indeed an CBDC that would be accessible to the public, and not just to major banking and financial players:
“… new technology can be used to make settling financial transactions more efficient. It also opens the possibility of a retail CBDC, which would be very innovative in that it would be accessible to a wide audience. “
A rare occurrence for a banker, Christine Lagarde does not call an CBDC to suppress the cash. She specifies that a digital euro would come as “a complement and not a substitute” for coins and banknotes.
Indeed, again according to the President of the ECB, the 2 combined (CBDC + cash) “would promote financial inclusion and offer consumers a choice”.
The issue of the digital euro is very present in the minds of European central bankers. The rapid issuance of a digital currency by the ECB indeed seems essential to them, faced with the threat of stablecoins from large private groups.