Stablecoins can threaten the stability of euro and other traditional currencies

Bank of France governor François Villeroy de Galhau warned about the threat of stablecoins.

The governor of the Bank of France said in a speech that private sector involvement could pose a danger for traditional fiat currencies. The solution to this problem — CBDCs, digital currencies made by central banks.

According to the governor of the Bank of France François Villeroy de Galhau, digital currencies backed by fiat money can fundamentally change the global financial system. This view he expressed during his speech at a conference in the Bundesbank on September 11.

The statement was made against the background of the readiness of leading European countries to accelerate the development and implementation of cryptocurrencies legislation.

Five EU countries (Germany, France, Italy, Spain and Holland) supported the initiative of the European Commission to pay special attention to the development of legal framework for operations with stablecoins. The Commission may submit its proposals on industry regulation by the end of September 2020.

“We in Europe face urgent and strategic choices on payments that will have implications for our financial sovereignty for decades to come.”

The main danger, according to the head of the Central Bank, is that commercial entities may start producing their own tokens. As a result, we will have financial systems that will start to compete with the state currencies.

The solution to this problem may be the issue of token by the Central Bank (CBDC). In fact, we are talking about an instrument that will be provided with fiat currency. The European Union should take part in the development of a new payment infrastructure and, if necessary, issue its CBDC, summed up de Galhau.

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Andrey Costello

Bitcoin-maximalist. Optimistic family man and miner with six years of age. I write about complicated things from the future for people of our days.