Governor of Bank of France Mr. Fancois Villeroy de Gallhau, has hinted that the Bank might issue their own stablecoin in the future. Speaking in Paris, he said that the coin could be used to tokenize the financial markets.
Financial regulators have long been skeptics of bitcoin and crypto, and Francois has been no exception; he has repeatedly warned the French people about bitcoin and the threats associated with the technology. However, he has not been an absolute critic as he has praised the technology behind bitcoin for a long time. Francois in a speech in 2017, also went on and said;
I would just like to say a few words on bitcoin, a subject which is attracting a great deal of attention here in China. It is associated with a useful form of technology, the blockchain, and Distributed Ledger Technology. Like other market participants, the Banque of France is experimenting with this innovative technology.
However, in pure regulators fashion, Francois was also quick to warn people about bitcoin and how it is not a currency and how the Bank of France doesn’t see it as a commodity. Just textbook statement from a governor of a central bank:
But beyond that, we need to be clear: Bitcoin is in no way a currency or even a cryptocurrency. It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility. The Banque of France reminds those investing in bitcoin that they do so entirely at their own risk.
Bitcoin and cryptos have never been a hit with the EU as well. Just last week the president of European Central Bank Mario Draghi attacked bitcoin by calling it an asset and said it is not a currency at all. Draghi’s statement came as a response to a student’s question during an event organized by the European Central Bank (ECB) for the youth.
Bitcoins or anything like that are not currencies, they are assets. A euro is a euro – today, tomorrow, in a month, it’s always a euro.
In his statement, he also threw his support behind the Euro saying that he believes in Euro and so should you. Draghi also responded to a question about whether bitcoin and other cryptos can disrupt the current financial system:
At this point, they are not significant enough in their entity that they could affect our economies in a macro way.
— European Central Bank (@ecb) May 8, 2019
Francois Villeroy de Galhau, while speaking at the conference in Paris, said that he doesn’t see a place for bitcoin and other altcoins in the current financial system. However, he sees stablecoins as the future and the answer to full-scale blockchain adoption. He said:
The Bank of France is observing with great interest initiatives in the private sector which aim at developing networks within which ‘stablecoins’ would be used in transactions involving ‘tokenized’ securities or goods and services
The statement may be a win for blockchain but it does not make the people working in the crypto space happy. On one hand, it proves that blockchain and digital tokens are indeed the future and can be easily integrated with the current financial system; on the other hand, it debunks the tokens that made blockchain what it is today. Francois’ vision for the future is not the change crypto enthusiasts were hoping for. Since the inception of the bitcoin, people have embraced it due to its disruption of the current financial world order. Removing the middleman is the fundamental idea of bitcoin. Creating a new coin that can interact with existing structures in place is not the disruption that people were hoping for.
France’s Crypto Regulations
Just last month, France became one of the first countries in the EU to bring crypto regulations into their financial system. On 11th April, 2019, the French parliament passed a law that allowed the French financial regulator, Autorité des marchés financiers (AMF), to regulate all the crypto exchanges doing business in the country. The AMF has kept the registration optional; however, the unregistered exchanges won’t be permitted to provide services like asset management and remittances. The law also enabled the exchanges for the first time to get their bank accounts opened. AMF’s chairman Robert Ophèle while talking about these regulations said:
These are common sense rules. This regime will enable us to address this new issue with a proportionate framework that both protects investors and fosters innovation. We believe it will attract good projects.