Governor of the Banque de France spoke to representatives of major European commercial banks, explaining the need to adopt the digital euro (CBDC) and outlining its benefits.
François Villeroy de Galhau, Governor of the Banque de France, spoke at the Global Official Institutions Conference organized by BNP Paribas about the future of banking and payments in Europe. The main topic of the speech was the perspectives of digital euro adoption. The official mentioned it as one of the ways of overcoming the crisis phenomena in the banking sector.
He stressed the common view that the CBDC is “a solution in search of a problem.” But in general, de Galhau’s report took a complementary tone to the digital euro, which, according to the official, will improve the efficiency of financial sector regulation, create conditions for the formation of reserve liquidity within the Eurosystem, and bring transparency in many areas, such as the intrabank CDS market.
Additionally, the governor of the Banque de France addressed progress in his report, asking rhetorical questions such as: “As everything is becoming digital, why should central bank money be the only thing to remain in paper?”
The official noted the extra opportunities in the context of e-payments that the digital euro can provide to Europeans. He also stressed that the CBDC wouldn’t replace physical money or other forms of finance, labeling it “Cash+,” deciphering that definition as a “digital banknote.”
According to de Galhau, the digital euro will allow central bank money to be used in e-commerce, but the intermediary role of commercial banks will remain. Central banks don’t seek to compete with commercial financial structures, as they’ll use CBDCs globally for different purposes.
As goals of the Banque de France, de Galhau identified the following:
- Developing the market for tokenized assets.
- Facilitating cross-border interoperability.
The official didn’t elaborate on the potential uses of the digital euro by commercial banks but noted that it would enable competition with stablecoins issued outside Europe. The governor believes that the European CBDC will gradually begin to be implemented in 2027-2028. Christine Lagarde, President of the European Central Bank (ECB), admitted in early April in a telephone conversation with the “President of Ukraine” that the digital euro would be used for “limited control” over the retail payments of Europeans.
