French Central Bank Chief Eyes Public-Private Partnership for Possible Digital Euro

Sep 11, 2020 at 12:18 UTC

Banque de France governor Francois Villeroy de Galhau (The Jacques Delors Institute/CC BY/Wikimedia Commons)

The head of France’s central bank has spoken of the potential benefits of private sector involvement in the development and issuance of a future European digital currency.

Francois Villeroy de Galhau, governor of the Banque de France, said in a speech Friday that a public/private partnership would be the best way to issue a central bank digital currency (CBDC) to retail users.
His comments were made at a conference hosted by the German central bank – the same event where the head of the European Central Bank (ECB), Christine Lagarde, said Thursday that the EU had fallen behind on CBDC development globally.
Both France and Germany have both been vociferous opponents to overseas companies, like Facebook, launching digital currencies that could compete with fiat money.
France’s finance minister, Bruno le Maire, said his government would push to have Libra banned from European soil last September.
While Villeroy de Galhau didn’t mention Facebook by name, he said the EU was already critically dependent on Big Tech firms for payments.
Left unchallenged, he said, they could shut out governments and central banks from having any monetary role in their own countries.
Rather than compete with private companies, Villeroy de Galhau said “appropriate synergies” between them and the public sector could lead to a better-designed CBDC being put into circulation one day.
This mirrors comments from the Bank of England earlier this year, who said private companies could resolve any shortcomings in the existing payments system with commercial solutions.
The Banque de France is currently working with eight companies, including Accenture and HSBC, to explore the regulatory and financial ramifications of launching a CBDC.

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