The head of France’s central bank has spoken of the potential benefits of private sector involvement in the development and issuance of a future European digital currency.
- Francois Villeroy de Galhau, governor of the Banque de France, said in a speech Friday that a public/private partnership would be the best way to issue a central bank digital currency (CBDC) to retail users.
- His comments were made at a conference hosted by the German central bank – the same event where the head of the European Central Bank (ECB), Christine Lagarde, said Thursday that the European Union had fallen behind on CBDC development globally.
- Both France and Germany have been vociferous opponents to overseas companies, like Facebook, launching digital currencies that could compete with fiat money.
- France's finance minister, Bruno le Maire, said last September his government would push to have libra banned from European soil.
- While Villeroy de Galhau didn't mention Facebook by name, he said the EU was already critically dependent on Big Tech firms for payments.
- Left unchallenged, he said, they could shut out governments and central banks from having any monetary role in their own countries.
- Rather than compete with private companies, Villeroy de Galhau said that "appropriate synergies" between them and the public sector could lead to a better-designed CBDC being put into circulation one day.
- This mirrors comments from the Bank of England earlier this year, which said private companies could resolve any shortcomings in the existing payments system with commercial solutions.
- The Banque de France is currently working with eight companies, including Accenture and HSBC, to explore the regulatory and financial ramifications of launching a CBDC.
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