Digital currency cannot be private, says Banque de France

No change in the position of the Governor of the Bank of France. Francois Villeroy de Galhau is categorical, the central banks must alone issue a digital currency. This role cannot be assumed by a private company.

Facebook’s Libra project highlights the risk to states and central banks of losing the currency monopoly. If the latter are actively considering issuing their own digital currency (CBDC), however, they still seem determined to block private initiatives in this area.

The Governor of the Bank of France, Francois Villeroy de Galhau, tried to remind him once again. As reported Reuters, the central banker is adamant on this point: "Money cannot be private, money is a public good of sovereignty. "

A digital currency, but regulated and sovereign

It thus excludes any inflection of the French position with regard to private cryptocurrency projects, such as that carried by Facebook. The France, like its European counterparts, brandishes the obligation to regulate.

The risks are increased with the anonymity offered to Libra users. If the project goes beyond payments and offers banking services, such as deposits, financial investments and credits, then it will have to be regulated like a bank, with a banking license in all the countries where it will operate. Otherwise, it will be considered illegal, "warned Francois Villeroy de Galhau last June.

However, central banks cannot be content with blocking the wishes of the private sector. The latter thus plan to issue their own digital currency. However, these steps are still at the examination stage.

An alternative to cash for individuals

The Governor of the Bank of France assure him, however, that these initiatives are not a reaction to Libra. The rationale, he adds, is technological change and the need of some banks for such digital currencies. These currencies could also be an alternative to cash for individuals.

In some northern European countries, notably Sweden and the Netherlands, the use of banknotes is decreasing extremely rapidly and they are wondering whether to give citizens access to a digital currency that is no longer a note physical bank but which has the same quality, in particular the security of a central bank, ”he emphasizes on France Inter.