No time to waste – Crypto needs to be regulated as soon as possible

After Germany, India or South Korea, cryptocurrencies are being sought by more and more countries? The Governor of the Bank of France, François Villeroy de Galhau, recommended the urgent establishment of a framework for the regulation of cryptocurrencies in order to avoid a possible violation of European monetary sovereignty.

The Governor of the Bank of France has identified the regulation of cryptocurrencies as a European priority

France has been one of the most progressive countries when it comes to virtual currencies. For example, in 2019, the French parliament passed a law allowing the ATF (the country’s tax office) to license cryptocurrency companies.

Now Villeroy has asked the European Union to urgently regulate the cryptocurrency space. This request seeks to push for cryptocurrencies to be regulated within one or two years, otherwise there is a risk of losing European monetary sovereignty.

During Tuesday’s financial conference in Paris, Villeroy said:

“I must emphasize the urgency here: we do not have much time left – one or two years. When it comes to digital currency and payments, we in Europe must be prepared to react as quickly as necessary or to risk undermining our monetary sovereignty. That’s something we can’t tolerate. “

The Governor of the Bank of France further described how cryptocurrencies play an increasingly important role in financial markets. An example is that in the early stages of the COVID-19 pandemic, the use of unsecured money decreased, a shift that could cause central bank money to play a negligible role. He therefore proposes that the European Union adopt a regulatory framework in the coming months.

Even France would like a piece of CBDC pie

Villeroy de Galhau has warned in the past against private digital assets such as stablecoins. In a speech in September 2020, he noted that big players could develop private financial systems, such as stablecoins, which could have a huge impact on financial sovereignty for the coming decade.

To this end, the governor has indicated that the European Central Bank cannot afford to lag behind in issuing its own central bank digital currency (CBDC). Earlier this year, the Bank of France successfully tested a CBDC pilot project and used the technology to process a $ 2.4 million interbank settlement on a private blockchain provided by the British blockchain company SETL.

The central bank continued to work on the creation of a digital currency supported by the European Central Bank earlier this month after successfully testing (in collaboration with the Swiss cryptocurrency bank SEBA, the Luxembourg private bank Banque Internationale à Lluxembourg and the Luxembourg Central Securities Depository LuxCSD) the CBDC cross-border experiment entitled ” Project Jura “. The experiment focused on the wholesale loan market rather than on public transactions, and the French central bank has indicated that it intends to conduct a decent line of tests for its CBDC this year.

Conclusion

Regulation and CBDC are two terms that are very often used in the cryptoworld this year, and I would personally guess that we will see them in a few years.