- Denis Beau, First Deputy Governor of Banque de France, highlights CBDCs as a pivotal force shaping the international monetary system.
- Beau emphasizes the need to prioritize cross-border issues in CBDC development, emphasizing proactive measures over afterthoughts.
Denis Beau, the first deputy governor of Banque de France, has emphasized the significant role that Central Bank Digital Currencies (CBDCs) can play in reshaping the global monetary landscape. In a recent address, he expressed his belief that CBDCs should serve as the foundation for a new international monetary system, particularly in cross-border payments.
CBDCs for Cross-Border Payments
Beau’s viewpoint diverges from the notion that CBDCs should exclusively facilitate local financial settlements or mimic traditional fiat currencies. Instead, he sees CBDCs as a catalyst for improving cross-border payments on a global scale. He stated:
“(CBDCs) are the catalyst for improving cross-border payments by enabling the build-up of a new international monetary system.”Denis Beau, Deputy Governor of the Banque de France
Blockchain Technology and Tokenization
Furthermore, Beau is committed to harnessing the potential of blockchain technology for tokenization in France despite the associated risks posed by cryptocurrencies. His vision includes fostering collaboration between the private and public sectors to deploy tokenized assets more efficiently.
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Building Synergy for Global Settlements
Banque de France is actively promoting global settlements and interoperability across various platforms, aligning with the worldwide excitement for CBDCs. Beau outlined two critical strategies for creating effective CBDCs: synergy between wholesale and traditional models and adherence to established models provided by institutions like the Bank for International Settlements (BIS) and the International Monetary Fund (IMF).
Integration of Automated Market Makers (AMM)
A notable aspect of the broad-scale CBDC development strategy is the integration of an automated market maker (AMM) into transactions across participating nations. This innovation aims to standardize payments, leveraging wholesale digital currencies for both personal transactions and delivery.
Regulation and Global Cooperation
French authorities have taken a stern stance on regulation in light of past industry collapses and fraudulent activities in the digital asset sphere. The impending implementation of the Markets in Crypto Assets (MiCA) regulation in Europe next year is indicative of this commitment.
Nevertheless, the Governor of Banque de France underscores the necessity of global support, emphasizing that regulation confined to a single jurisdiction may not be effective.
Project Mariana: An Experimental Collaboration
Beau also referenced Project Mariana in his address, a collaborative initiative involving Banque de France, the Swiss National Bank, and the Monetary Authority of Singapore. In partnership with the Bank for International Settlements (BIS), these central banks conducted tests related to payment settlement and cross-border utilities using hypothetical virtual currencies.
The experiment successfully demonstrated the use of a token standard on a selected blockchain, facilitating transactions between multiple networks through a specific decentralized exchange. However, it is important to note that the project’s success does not imply an endorsement of any particular blockchain or CBDC. Beau clarified:
“Project Mariana is purely experimental and does not indicate that any of the partner central banks intend to issue CBDC or endorse DeFi or a particular technological solution.”Denis Beau, Deputy Governor of the Banque de France
In conclusion, Denis Beau’s perspective as the first deputy governor of Banque de France shows that CBDCs can be significant in reshaping the global monetary system, with a particular focus on enhancing cross-border payments. His emphasis on collaboration between the public and private sectors, regulatory considerations, and international cooperation highlights the complexity and significance of the ongoing CBDC developments in the financial world.
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