Francois Villeroy de Galhau, the Bank of France Governor, warns against the crypto market and said that cryptocurrencies will soon threaten the power of the centralized financial institutions. He believes this will happen in less than two years if the Banks fail to act.
This isn’t the first time that Villeroy de Galhau has expressed his concerns for digital currencies. At a speech he presented at the Bundesbank conference last September, the Governor stressed heavily the need to draft regulations for cryptocurrencies. He in particular gave a scary prediction: that big tech companies will use digital currencies to challenge the authority of monetary systems.
“The current digitalization triggers the risk that Big Techs, leveraging on their global reach, will build private financial infrastructures and “monetary” systems, competing with the public monetary sovereignty since they will position themselves as issuers and managers of a universal “currency”.
Villeroy de Galhau inisists The Bank Of France takes the development of a CBDC with utmost priority
The government forewarned that Big Tech companies could create their own stablecoins. Of course, most crypto enthusiasts would agree that the global financial system has a lot of issues. But the idea of tech giants reigning supreme over the current financial system could lead to a nightmarish technocratic outcome.
However, according to a Bloomberg article from May, the Governor said he is observing stablecoins “with great interests.” He believes that stablecoins are very promising for the Bank of France’s stability and control in the future. The Bank of France has also already piloted their own CBDC in January.
According to the article from Forbes in the tweet above, the Bank of France conducted a subsequent CBDC trail in March which ran successfully. Diana Barrero Zalles, a Forbes contributor stated in a recent article:
“After launching a program in March 2020 to experiment with CBDCs, the Banque de France successfully completed a simulated securities settlement using a wholesale CBDC, which as opposed to a retail CBDC, restricts access to predefined users such as commercial banks.”
She believes that the Bank of France is closer to completing their own CBDC protocol than some might think.
Final thoughts on future of crypto market in France and globally
Villeroy has brought to light some important insights into the the possibilities of global finance in the future. It appears there a more forces fighting for supremacy in the digital currency movement. There are the retail crypto investors who in general want to establish a new finacial system outside of governments and financial institutions. Then, there are the banks and governments who want to create their own CBDCs and regulate the cryptocurrency market. Finally, Villeroy mentions the threat of Big Tech stablecoins.
One thing is for certain – the Bank of France is currently moving fast to successfuly implement their own CBDC protocol.
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Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.