Most discussions about central bank digital currencies (CBDC) are somewhat reserved. François Villeroy de Galhau, the Governor of the Banque de France, made a forceful speech in favor of a digital euro, talking at the Bundesbank virtual conference. “Let me be clear: we cannot allow ourselves to lag behind on CBDC,” said the Governor.
He outlined a one or two-year window for a decision about a CBDC. His rationale is that there are two major risks. BigTech and social networks will create monetary systems that compete with public money sovereignty. He didn’t mention Facebook or any other network by name but pointed out Europe’s failure to create a global social network.
That’s a good point. Most major Western social networks come from the U.S. and there are strong social networks in Asia such as Tencent’s WeChat and Japan’s Line. The latter is controlled by South Korea’s Naver and also has a major presence in Taiwan, Thailand and Indonesia. But even if there were a European social network, would the central banks be willing to cede sovereignty to the private sector?
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