The Governor of the France Central Bank is calling for crypto regulation to preserve the European global financial dominance. However, Francois Villeroy de Galhau believes that nation will find it difficult to keep its sovereignty in the financial sector.
According to the Governor, if the European Union doesn’t regulate crypto very soon, the euro may not keep its international role.
Governor Galhau believes that the EU will face “an erosion of their monetary sovereignty” if the responsible bodies don’t act very fast. He even mentioned that crypto regulation should be implemented in the nearest months and not too far away. In his opinion, a great threat looms over the euro if the action delays further.
Before this present call for regulation, the France Central Bank Governor had called for cryptocurrency regulation. In September 2020, he also spoke about crypto regulation in a conference titled “Banking and Payments in the digital world.”
He mentioned that Stablecoins poses a threat to both central bank and commercial bank money during his speech. Even when they don’t have the same credit risk, neutrality, credit risk service continuity, and liquidity terms.
Also, the Governor stressed that Stablecoins is a two-way trend that brings both benefits & risks. He, however, agreed that the present payment arrangements have flaws.
Everyone could acknowledge and not just in the areas of cross-border transactions. But leaning towards some innovations in the payment arrangement will not fix the deficiencies unless they tackle them from the roots.
Although later in his speech, he also mentioned that they would not lag in creating their own CBDC even if it’s a retail digital currency so that the public can access central bank money. But his opinion means that a Central Bank Digital Currency could be the way forward to protect the European financial sovereignty.
Others Calling for Crypto Regulation
Another prominent figure in the financial sector had also mentioned the need for crypto regulations. So even though he didn’t say it precisely as Governor Galhau, he still meant the same thing.
In February 2021, the AMF Chairman, Robert Ophele of France, also opined that there should be a new approach to crypto regulations. In his opinion, this robust approach will facilitate more growth and development in the sector, especially for innovative projects.
Then, he mentioned that Europe should put adequate regulatory policies in place for crypto transactions. However, he also noted that these regulatory policies shouldn’t be too strict, or crypto-based businesses will leave the EU.
So, in his defense, the AMF Chairman had suggested an approach that’ll work for the parties involved. According to him, those products that are not financial instruments should be regulated.
Also, the crypto products that are the government regards as financial instruments should also have a legislative proposal covering them.