Two solutions for partnering innovation
Innovating to preserve the role of central bank money in the digital era
To preserve the role of central bank money, the Eurosystem is considering introducing new forms of central bank currency that could complement existing forms of money without replacing them :
- A “retail" CBDC (the digital euro) would be the digital equivalent of banknotes: it would allow the general public to send and receive payments the length and breadth of the euro area, in central bank money, just as they can do with banknotes. Like banknotes, it would also guarantee a high degree of transaction confidentiality. As well as contributing to the "anchoring role" of central bank money, a retail CBDC could also strengthen European strategic autonomy and economic efficiency by facilitating the emergence of innovative pan-European means of payment created by private players.
- The Eurosystem will also conduct exploratory work to study how tokenised assets in central bank money could be settled using different technologies. A "wholesale" CBDC would enable financial players to settle tokenised assets in central bank money (either directly or indirectly). It could also help to improve the efficiency of cross-border transactions.
Creating a framework of trust
The Banque de France ensures the smooth operation of market and payment system infrastructures and participates in the work of the European legislator.
Central banks, along with the regulator, must ensure that the legal framework treats market activities fairly and responds proportionately to risks (based on the "same activity, same risk, same rule” principle). This approach helps to ensure fair competition between players and to prevent any risk of regulatory arbitrage, including between jurisdictions.
The European legislator has adopted this approach by drafting and adopting a set of measures on digital finance (the "digital finance package"), including a Markets in Crypto Assets (MiCA) regulation.