The digital euro might not be too far away.
French Central Bank Governor Stresses the Importance of CBDC
With the global race for central bank digital currency (CBDC) heating up with each passing day, countries and central banks across the world are walking the extra mile to ensure they do not get left behind.
In the latest of such developments, Francois Villeroy de Galhau, Governor of the French Central Bank, emphasized the importance of a digital euro. Speaking at the Bundesbank virtual conference, de Galhau remarked, “Let me be clear: we cannot allow ourselves to lag behind on CBDC.”
Notably, the governor outlined a 1-2 year window for a clear decision pertaining to a Europe-focused CBDC. He noted several points that necessitate the need for CBDC including the push observed by Big Tech and social media platforms to create own monetary systems to compete with public money sovereignty.
For the uninitiated, last year, Facebook unveiled its ambitious Libra cryptocurrency project that aimed to compete with sovereign money. Unsurprisingly, however, the project didn’t sit well with financial regulators across the globe which forced the social media titan to redesign Libra to overcome regulatory hurdles.
Central Banks Need to Catch up with the Private Entities
Interestingly, it is not only Facebook that is vying to create its own money to compete with the state-issued sovereign money we have known for so long. Asian social media firms and IM apps, such as Japan’s LINE and South Korea’s Kakao are also considering launching their own cryptocurrencies to fuel their product ecosystem and lessen dependency on continually eroding fiat.
Additionally, de Galhau identified another concern, that of the launch of a CBDC by other countries without international coordination. This point is particularly significant as a CBDC could easily extend beyond the geographical boundaries of a country, which could, in turn, create situations that could require cooperation between different countries.
As far as the question of CBDCs in Europe is concerned, several countries from the continent have expressed their interest to spearhead the development and adoption of a national CBDC.
In July, BTCManager reported that the governor of the Bank of England (BOE) had said that the bank was assessing whether it should go ahead with the issuance of a CBDC.
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