As China continues to develop its digital Yuan, the number of countries that are starting to work on their own central bank digital currency (CBDC) is also increasing. The Bank of France governor Francois Villeroy de Galhau has asked that the European Union create a regulatory framework for cryptocurrencies, and that they move “as quickly as possible”.
At a Paris Europlace financial conference, Villeroy emphasised the importance of making crypto regulation a priority.
"I must stress here the urgency: we do not have much time left, one or two years," said Villeroy. “On both digital currencies and payments, we in Europe need to move as quickly as possible.”
During the virtual conference the Central bank governor also warned that governments need to move quickly if Europe were to maintain monetary sovereignty, and need to consider the threat posed by central bank digital currencies as well.
Although the Peoples' Bank of China has said it doesn't intend for its digital yuan to replace any existing currencies, the concern by many governments is the effects it can have on other global currencies.
President Joe Biden’s administration is also keeping a close eye on the progress of China’s digital currency. According to Bloomberg, various government officials are concerned by the potential implications of the rollout of a digital Yuan. The unofficial concern by the U.S. government is that the digital Yuan could have an impact on the dollar’s status as reserve currency. Officials in the U.S are reportedly stepping up their scrutiny of China’s central bank digital currency, as are a number of nations around the world.
The Bank of France is focusing on ways to prevent the weakening of the Euro, as China’s central bank is poised to be the first central bank to release a digital currency. Villeroy’s comments brought up both the urgency in addressing the need for a digital currency, as well as the role of the pandemic in drastically reducing the reliance on cash.
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