A French central banker is calling for a global regulatory framework on crypto assets.
at an Official Monetary and Financial Institutions Forum (OMFIF) meeting in London on Tuesday, Denis Beau, a deputy governor of Banque De France, said:
And the only way to ensure that, he said, is with a standardized regulatory regime.
The comments come as Libra, the Facebook-led digital currency project, has raised the ire of regulators and central banks as a threat to the financial world order.
Comparing Libra to central bank-issued digital currencies (CBDC), Beau said the yet to be launched coin “may achieve significant market power, thus posing risks to security and financial stability.”
Beau did not offer any direct answers to Libra’s challenge, other than to note the need for global regulations and hopes that central banks will experiment with CBDCs of their own.
He was bullish on the technology. In a global financial ecosystem reliant on costly, and often cumbersome, money transfer mechanisms, Beau said that distributed ledger technology "could help remedy” many of the current issues.
But tokens available today cannot fill that niche, he said. Cryptocurrencies are generally too volatile and pricey to transfer funds effectively and lack the government backing he said is necessary to become a trustworthy store of value, Beau said.
That should give central bankers reason to consider new ways to offer their money supply, he said.
Bank of France image via Shutterstock