Villeroy de Galhau discusses not only the e-euro but also the banking crisis and its consequences for the eurozone.
With ongoing developments in the fintech world, central banks including the Banque de France are actively investigating the concept. central bank digital currencies (CBDC) as a viable replacement for traditional fiat currencies.
Accordingly, being at the forefront of these discussions has seen one of its key figures, Banque de France governor François Villeroy de Galhau, adopt a diplomatic approach in soft-selling the proposed Euro CBDC to commercial bankers. Whereas Speaking At this year’s Global Official Institutions Conference, Villeroy de Galhau emphasized that CBDCs would be ‘a solution in search of a problem’ and not a competitor to fiat currencies.
Recognizing the need to address potential skepticism and resistance, he raised an interesting question:
“As everything goes digital, why should central bank money be the only thing that remains on paper?”
With this rhetorical question, Villeroy de Galhau aimed to challenge the traditional mindset surrounding central bank money and highlight the need for innovation.
According to Galhau, the proposed e-euro, also known as ‘Cash+’, is envisioned as a digital banknote that combines the advantages of traditional cash with the capabilities of a digital currency. If Was granted the right Villeroy de Galhau, by the European Central Bank Governing Council, said that the digital euro would be introduced in a phased manner in 2027 or 2028.
France CBDC Functionalities
One of the key features of the e-euro highlighted by the central bank governor is the commitment to ensure confidentiality. In particular, this feature addresses privacy concerns and provides a level of anonymity similar to physical cash transactions, making the e-euro an attractive option for those who value their financial privacy.
Additionally, Villeroy de Galhau highlighted that the basic functionality of the e-euro would be free for individuals. This approach aims to make digital banknotes accessible to all, ensuring that financial inclusion remains a priority. Furthermore, the e-euro extends the scope of central bank money beyond traditional cash, allowing individuals to use it in e-commerce transactions.
Villeroy de Galhau said that it is the responsibility of central banks to enable citizens to access and use the digital euro. However, he highlighted that the decision to use a digital euro would ultimately be a matter of personal freedom.
Furthermore, he emphasized that the digital euro is not intended to replace traditional currencies, but to complement existing payment options. The coexistence of different forms of money allows individuals to choose the most convenient and suitable means of payment for their specific needs and preferences.
Villeroy de Galhau addresses the recent banking crisis
In his speech, Villeroy de Galhau covered not only the e-euro but also the banking crisis at the beginning of the year and its consequences for the eurozone.
He acknowledged that the eurozone banking system remained stable during the crisis, crediting European regulation and supervision for its resilience. Villeroy de Galhau highlighted the effectiveness of the regulatory framework, which played an important role in the safety of the eurozone’s banking system.
However, he also pointed out that some incidents, such as acquisition Of credit suisse group (NYSE: CS) by UBS Group AG (SWX: UBSG) raised new questions regarding reliable crisis resolution. In particular, he noted that the framework for the European Central Bank (ECB) to provide “Eurosystem resolution liquidity” has not yet been established.
Benjamin Godfrey is a blockchain enthusiast and journalist who loves to write about real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies drives his contributions to well-known blockchain-based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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