On Monday, Denis Beau, First Deputy Governor of the Banque de France, discussed the risks and opportunities brought by the digitalization of finance and the potential for a central bank digital currency (CBDC).
There is much to look forward to with the digitalization of finance. Financial inclusion, greater payments efficiency and the smoother transmission of monetary policy to the economy are creating opportunities within the financial system.
Though Beau lauded these opportunities in his speech, he also expressed concern that digitalization is creating significant competition for central banks from alternative payment systems. The retail payment space is seeing huge growth from new players such as Big Tech firms with considerable financial resources and worldwide networks.
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