The Deputy Governor of the French central bank, Denis Beau, has called for the eurozone to equip itself with a blockchain-based payment system to make euro transactions faster and cheaper.
Beau gave a speech last Thursday at the AFME conference in Paris, where he spoke about the benefits of using distributed ledger technologies.
According to the Deputy Governor, an interesting use case in this sense could be cross-border payments, given that residents of the EU are often forced to wait for extended periods before such payments are made, not to mention the costs involved.
According to Beau, tokens based on distributed ledgers could disrupt traditional methods in order to better respond to market needs.
In addition, Beau said that the Eurozone has a responsibility to at least consider launching a central bank digital currency (CBDC), especially since other projects with disorderly approaches and heterogeneous adaptations might arise in its place.
“We, at the Banque de France, are therefore quite open for experiments in that direction, together with the ECB and other central banks of the Eurosystem, in particular with regard to a wholesale Central Bank Digital Currency”.
Beau admits that technological innovation can create new services, reduce barriers and contribute globally to the progress and development of the economy, but he also argues that growth should be sustainable, inclusive and compatible with a necessary level of resilience.
For this reason, he stresses that central bankers and supervisory authorities are the ones responsible for financial stability, and must accept the challenges posed by innovation. In this regard, Beau suggests that the policy framework needs to be adapted to ensure that innovation is accompanied by sustainable, inclusive and resilient growth.
The risks he sees in the use of new technologies in the financial sector are those related to consumer data protection, money laundering, cyber risks and the impact on competition, as well as unspecified systemic threats caused by major players.
At the technological level, he refers to the tokenisation of financial assets, combined with the use of blockchain-based tools, as the response to market needs.