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France and the EU want to build a digital currency

Photo of: Nathan VDH
by Nathan VDH

The Banque de France urgently wants a digital euro.

In a statement issued on September 11, François Villeroy de Galhau, Governor of the Banque de France, encouraged European bankers to prepare quickly for the era of digital payments:

“In Europe, we are faced with urgent and strategic choices in the area of payments, choices that will have implications for our financial sovereignty for decades to come. »

His concern is particularly focused on “Big Techs” stablecoin projects, such as Facebook and his Libra project. These giants could quite easily set up “private monetary systems”, which would compete directly with central bank currencies.

This is where the urgency to issue, in a coordinated manner, a Europe-wide central bank digital currency (MNBC) for Villeroy de Galhau comes from. The banker even insists heavily :

“Let me be clear! We cannot afford to be left behind in [the issuance] of digital currencies. »

Christine Lagarde is also pushing for the creation of a European digital currency. 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 their own cryptocurrency that could supplement the euro and be under public control.

Conversely, the introduction of a digital euro would allow the Eurosystem to “be at the forefront of innovation”. This is indeed a digital currency that would be accessible to the public, and not only to the major banking and financial players:

“(…) new technologies can be used to make the settlement of financial transactions more efficient. It also opens up the possibility of a retail digital currency, which would be very innovative in that it would be accessible to a wide public. »

A rare occurrence for a banker, Christine Lagarde does not call for this digital currency to remove cash. She specifies that a digital euro would come as “a complement and not a substitute” for coins and banknotes.

Indeed, still according to the President of the ECB, the two “would promote financial inclusion and offer choice to consumers”.

The issue of the digital euro is very present in the minds of European central bankers. The rapid issuance of digital currency by the ECB seems to them to be essential, given the threat of the stable corners of large private groups.

As a reminder, the EU and France especially had strongly disagreed with the issuance of Libra by Facebook and they are certainly some of the strongest opponents of digital currencies in general. This could certainly be a case of “if you can’t beat them, join them” rather than actual interest for crypto and digital currencies.