The Digital Euro Journey
France’s Banque de France is shaking things up with the digital euro, folks! François Villeroy de Galhau recently announced that the first phase of its experiments wrapped up, and guess what? The second phase is just around the corner! Scheduled for this year, it promises to flex its muscles with four to five new experimental adventures. So, buckle up!
Achievements Under the French Presidency
At the Paris Europlace International Finance Forum, Villeroy de Galhau glowed like a proud parent sharing accomplishments under the French presidency. The EU has made significant strides in regulating the wild, wild west of crypto-assets, notably through the Transfer Fund Regulation (affectionately dubbed the Travel Rule) and the Markets in Crypto-Assets (MiCA). These regulations are like the safety nets of a high-wire act, helping to keep everything balanced and secure.
The Rationale Behind Retail Digital Euro
The conversation about why we need a retail digital euro is sure to get your gears turning. Villeroy calls it a necessity to keep central bank money relevant despite the digital frenzy threatening its existence. Sounds dramatic, right? But he advocates for utilizing intermediaries, the real MVPs of customer relationships, to handle operations—note to self: central banks aren’t exactly known for their stellar customer service!
Why Wholesale CBDC Matters Too
Now let’s not forget about the wholesale CBDC, which is all about those interbank transactions. Villeroy pointed out how crucial it will be, comparing it to a backend hero of finance. Think of it like the unsung hero of your favorite movie – no one pays attention to it until it saves the day. This system is envisioned to handle everything from settling securities via digital ledger technology to handling cross-border cash flows. Sounds like a busy weekend!
The Future Tests and Interoperability
Ready for the future Pro-Tip? The upcoming experiments will focus on testing a digital euro prototype alongside private entities and other central banks as we gear up for the pilot regime kicking off in 2023. Villeroy emphasizes that DLT is going to work harmoniously with the traditional systems rather than playing the part of a rebel. They aim for interoperability—because who doesn’t love a good team-up?
