French banks, with ECB’s help, must ‘seize the question on digital currencies’
France has been one of the countries at the forefront of the debate on digital currencies, CBDCs and of course, Facebook’s controversial project, Libra. This debate gained more steam recently after prominent French MPs Laure de La Raudiere and Pierre Person met with France’s Minister of the Economy, Bruno Le Maire to discuss the advantages of adopting blockchain technology in the banking sector, according to a report.
France, largely, has not really been in favor of cryptocurrencies for a long time. In fact, France was one of the first countries to issue regulations on crypto-assets. Even the Governor of the Bank of France, Francois Villeroy de Galhau, had recently stated that though digital currencies could be useful, central banks should be in charge of issuing it and not private companies, in what many interpreted as a direct shot at Facebook.
Deputy Laure de La Raudière, who has been vocal about the advantages of blockchain adoption for some time now and Pierre Person, a member of the French National Assembly, urged Bruno Le Maire to encourage banks to test digital stablecoins. This, the MPs noted, is very essential for the development of the blockchain ecosystem and to anticipate the arrival of foreign players in the field.
According to the report, Pierre Person commented,
“We do not have the will to destabilize the business model of commercial banks, but they must quickly take up the question of stablecoins, at the instigation of the central bank.”
Laure de la Raudiere went on to add that French banks would be in the lead if they take to blockchain right now and understand how the technology works. However, contrary to what the Bank of France Governor stated, the MP claimed that commercial banks, and not the central bank, must take the lead on digital currencies, with inputs from the ECB. The MP noted,
“It is the commercial banks which must seize the question of the digital currencies, but there must also be an impulse of the European Central Bank.”
The final point that was discussed during the meeting was the Pacte Law, a law that enhances legal certainty and the access of crypto-players to banking services. Expanding on the same, one of the deputies stated,
“We want to stay on the device of the Pacte law because it seems solid to us. If the regulations were changed without a legislative debate, there would be both a lack of understanding of the players and a loss of competitiveness for France.”
Interestingly, a recent study released by the Bank of France had also discussed the possibility of the ECB launching a CBDC. The study stated that the issuance would depend on the selected guidelines for the crypto-asset as it would need to be integrated into existing provisions to avoid re-amendment of legal texts.