Dig­i­tal currencies, though use­ful, can’t be pri­vate: Bank of France’s

AMBCrypto Weekly - - News -

Dig­i­tal currencies are in­creas­ingly be­ing viewed as a re­li­able al­ter­na­tive off-late. Be it U.S-Iran ten­sions or the eco­nomic slow­down in de­vel­op­ing coun­tries, peo­ple are now cu­ri­ous about cryp­tocur­rency and its use cases.

How­ever, the Gov­er­nor of the Bank of France, Fran­cois Villeroy de Gal­hau, be­lieves oth­er­wise. In a state­ment re­leased on 25 Jan­uary, the Gov­er­nor said that though dig­i­tal currencies could be use­ful, cen­tral banks should be in charge of is­su­ing it and not pri­vate com­pa­nies, a re­port said.

Villeroy also as­serted that the state­ment is not a re­ac­tion to Face­book’s Li­bra plan, but a re­sponse to the rapid growth of blockchain tech­nol­ogy and some banks’ need for dig­i­tal currencies.

In a talk with France In­ter Ra­dio, Villeroy stated, “In some north­ern Euro­pean coun­tries, notably Swe­den and the Nether­lands, the use of ban­knotes is fall­ing ex­tremely quickly and they are won­der­ing whether we need to give cit­i­zens the right to dig­i­tal money that is no longer a phys­i­cal bank note but which has the same qual­ity, notably the se­cu­rity of a cen­tral bank.”

When asked if dig­i­tal money could be is­sued by pri­vate com­pa­nies, Villeroy de­clared that cur­rency can­not be pri­vate, adding that money is a pub­lic good of sovereignt­y. He added that cen­tral banks are in be­tween ex­per­i­ments on dig­i­tal money and that the is­sue would be stud­ied by the Eu­ro­zone’s cen­tral banks.

Back in 2019, the French gov­ern­ment had called for cryp­tocur­rency rules at the Euro­pean Union (EU) level, along with the creation of a “pub­lic dig­i­tal cur­rency.” France’s Min­is­ter of Econ­omy and Fi­nance, Bruno Le Maire. had re­port­edly stated that a com­mon frame­work on cryp­tocur­ren­cies was needed for all 28 EU coun­tries.

How­ever, France is not alone in con­tem­plat­ing such ac­tions. Ac­cord­ing to a re­cent state­ment pub­lished by the Bank of Eng­land, the cen­tral banks of Canada, the United King­dom, Ja­pan, Euro­pean Union, Swe­den, and Switzer­land have to­gether cre­ated a group with the Bank for In­ter­na­tional Set­tle­ments (BIS) to re­search and an­a­lyze the po­ten­tial of cen­tral bank dig­i­tal currencies (CBDCs).

Ad­di­tion­ally, the Pres­i­dent of the Euro­pean Cen­tral Bank (ECB), Chris­tine La­garde, also just days ago an­nounced that the ECB has as­sem­bled a task force to an­a­lyze the fea­si­bil­ity and po­ten­tial out­come of cre­at­ing a CBDC.

Though the Euro­pean Cen­tral Bank is open to the idea of a dig­i­tal Euro equiv­a­lent, it has ac­tu­ally been skep­ti­cal about its cit­i­zens hold­ing too much of it. The Swiss gov­ern­ment had pre­vi­ously stated that a dig­i­tal Swiss franc would do more harm than good, con­clud­ing that the in­tro­duc­tion of a dig­i­tal cur­rency would in­deed risk fi­nan­cial sta­bil­ity.

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