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As technology reshapes money itself, Europe faces a decisive challenge: ensuring that monetary innovation strengthens sovereignty rather than weakening it. In this session, Emmanuel Moulin, Governor of the Banque de France, will outline how the Eurosystem is extending the euro into the digital age: from the digital euro to wholesale CBDC and tokenised finance. He will also address the rise of stablecoins, the risks of digital dollarisation, and the need for a well-tailored regulatory framework.
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00:20The speaker who is coming now is somebody who is really an unusual individual.
00:30He has been in the civil service, he has been in private services, he has been the Chief
00:41of Staff of Prime Minister, Chief of Staff of the President of the Republic, and he is
00:48now the Governor of the Banque de France, our central bank.
00:54He is probably one of the best economists that we have in France, and probably also one
01:04of the most brilliant minds that I have met.
01:07So please welcome Emmanuel Moulin, Gouverneur de la Banque de France.
01:23Thank you, Maurice.
01:24Thank you very much.
01:25Super.
01:25Super.
01:37Ladies and gentlemen, it's a great pleasure to speak before you today.
01:42Let me warmly thank my dear friend Maurice Levy, who I think has been a little bit carried
01:52away in his presentation, but I thank him for his kind words.
01:57For a relatively new central banker, I've been only two weeks in the job, VivaTech perfectly
02:07embodies the dialogue we need between innovators and trusted public institutions to reconcile
02:15innovation with stability and strengthen European sovereignty.
02:20The euro has been a major success, a major achievement in this respect, and it is currently supported
02:31by 82% of European citizens.
02:35As technology is now reshaping money itself, our task is to extend the euro into the digital
02:45world.
02:47In an ecosystem made up of digital payments, tokenized assets, and stable coins, central
02:55bank money must remain an anchor of trust.
03:02This means that central banks cannot remain on the sidelines of innovation.
03:08They must help shape monetary innovation alongside market players.
03:13And this is a revolution full of promises, but it also raises new challenges for stability, trust,
03:21and sovereignty.
03:23The message I wish to convey today is simple yet ambitious.
03:29Innovation is reshaping the monetary landscape.
03:33It is creating a revolution in money, in payments, and we are seeing a new world which is changing
03:43the foundation on which we have lived up to now.
03:46And our ambition as Europeans is to anchor innovation in sovereignty.
03:56So we have an evolving payment landscape bringing new opportunities.
04:01The payments ecosystem is undergoing two major simultaneous shifts affecting both retail payments and
04:12wholesale settlements.
04:13First, the use of cash is gradually declining while digital payments continue to expand,
04:22driven mainly by cards and mobile payments, in particular in countries like France, and also driven by the growth of
04:34e-commerce.
04:34France ranks first in Europe for cashless payment transactions, with close to 33 billion transactions in 2024, up 5.2
04:45% in one year.
04:47And obviously, the COVID crisis has increased the share of cards payment.
04:54Cards remain the dominant cashless payment instrument in 2024.
04:59They accounted for 60% of non-cash payment, up from 45% in 2014.
05:07Second, digitalization is now expanding into financial assets through tokenization, which is a process of representing financial assets or deposits
05:19in the form of tokens to be recorded on the distributed ledger technology.
05:26Tokenization is the next logical step in the evolution of the monetary and financial system, as it can integrate messaging,
05:38reconciliation and asset transfer into a single seamless operation.
05:45And it's true that payments have been a friction model.
05:51And that's by friction that a lot of intermediaries make money.
05:56This is going to disappear with tokenization.
05:59It paves the way for new arrangements in cross-border payments, in securities markets and beyond.
06:06Tokenization can bring significant efficiency gains by reducing settlement times and transaction costs and by enabling mechanisms such as smart
06:18contracts and delivery versus payment.
06:21But this digitalization goes also with new risks for monetary sovereignty and financial stability.
06:31These changes are not taking place in a strategic vacuum.
06:35In a more fragmented geopolitical environment, payment infrastructure increasingly raise sovereignty issues as they carry strategic value, data and standards.
06:50Europe already heavily depends on non-European actors in retail payments, notably through card schemes and digital wallets.
07:01International card schemes account for close to two thirds of card payments in the Euro area, with several countries relying
07:10entirely on them.
07:12So we don't really have a European card payment system.
07:17We are relying on American actors and we are vulnerable to any decision of sanctions or decision to cut this
07:26service by foreign authorities.
07:31With stable coins, the risk could extend further.
07:35Europe could become more dependent on non-European infrastructure and on non-euro settlement assets.
07:46Stable coins combined market capitalization has grown from less than 5 billion in 2019 to 300 billion in 2026.
07:58Overwhelmingly dollar backed and strongly promoted by the US administration,
08:04stable coins generate a serious risk of digital dollarization and privatization of money.
08:15While heightening financial stability risk, especially if they become more interconnected with the traditional financial system,
08:24as well as raising anti-money laundering concerns.
08:28Their growing use could also weaken monetary policy transmission.
08:32This is why Europe must shape innovation rather than merely absorb it.
08:39We must transpose the strengths of our monetary system from the analog to the digital world.
08:47Europe response is already taking shape by addressing central bank money to the digital age,
08:56fostering regulated private money in euro and strengthening our regulatory framework.
09:02So we don't, it's not that we want to resist innovation, we really want to be part of it and
09:08to steer it for the common good.
09:12Firstly, we need central bank money in the digital world.
09:16A digital euro for the general public and wholesale CBDC for the interbank market will be launched in the euro
09:24area.
09:24At this stage, the question is no longer whether we should move forward but how to do so in the
09:30most effective way.
09:32Success will require close cooperation with all stakeholders and we plan to have a digital euro as a digital banknote
09:41as soon as 2029.
09:45It will transpose the features of cash to the digital world while preserving the anchoring role of central bank money.
09:55We have already agreed to a digital euro covering both online and offline use case accepted universally in the euro
10:06area,
10:07offering a high degree of privacy and delivered at the lowest possible cost.
10:12So you will be able to pay in the euro area with a digital euro which will complement your bills
10:20and cash.
10:21The digital euro will not eliminate cash, it will be complementary and cash will remain widely available and accepted.
10:34For the interbank market, the euro system is also developing a strategy built around two complementary projects.
10:40First, a project called Pontes, which addresses immediate market risk.
10:47It will deliver the first version of wholesale central bank digital currency, enabling financial intermediaries to settle DLT-based transactions
11:00in central bank money on a euro system operated DLT platform.
11:05This is very important because in a world where you have more and more digital money, you run the risk
11:12of having islands and a fragmented landscape.
11:16And having a digital central bank money can create a bridge between all these different private monies.
11:23Second project, Apia, looks further ahead. It will explore in close cooperation with market participants the future architecture of an
11:34integrated DLT-based financial ecosystem encored in central bank money.
11:39And this project should deliver in 2028.
11:47So together, these two projects form a coherent strategy meeting today's needs while building tomorrow's infrastructure.
11:56Secondly, bank deposits must also enter the digital world through tokenized deposits and regulated forms of commercial bank money in
12:07euro.
12:07While the provision of CBDC is essential, it is not intended to cover all users in the tokenized ecosystem.
12:17It is also necessary to have a strong and efficient commercial bank money offer so that the European two tier
12:25monetary system can evolve while fully preserving monetary sovereignty.
12:31The offer should include tokenized bank deposits, euro backed stable coins issued by banks and the payment infrastructure to enable
12:42multilateral clearing of these commercial bank money tokens naturally articulated with CBDC.
12:49This is precisely where the Bank of France and the euro system intend to act as catalysts, not as substitute
12:57for financial institutions, but to support the European financial system in developing the offer swiftly and in a coordinated manner.
13:07Lastly, all these innovations must be supported by a well tailored regulatory framework.
13:13This is particularly true for stable coins, which combine a promise of liquidity with potential run risks, much like money
13:22market funds in the analog world.
13:24Innovation can only be sustainable if it supports financial stability, monetary sovereignty and consumer protection.
13:34Europe is not starting from scratch.
13:36We already have some regulation on PSD2, PSD3.
13:41We have built an advanced framework for payments.
13:45We also have been the first major jurisdiction to regulate crypto assets through MICA.
13:51But this framework must now be stressed.
13:55MICA only partially addresses the risk linked to a rapid adoption of stable coins issued by non-banks and non
14:03-European actors.
14:04We should better regulate the use of stable coins for everyday payments and multi issuer models, including when the same
14:14stable coin is issued both within and outside the EU.
14:20Finally, rules must be applied consistently across Europe.
14:26Regulation cannot be effective if firms can shop around the most linear jurisdiction and then operate across the single market.
14:36This is why strong European supervision is needed to ensure a level playing field.
14:43Allow me to conclude with a few words from Jean Monnet.
14:48Jean Monnet was one of the creators of the European Union.
14:52Sovereignty withers when it is frozen in the form of the past.
14:57To preserve what the euro has achieved, we must allow it to evolve.
15:03The future of money will be written in code, but it must still be backed by trust.
15:10The task of the euro system and of the Banque de France in particular is to modernize central bank money
15:19for the digital age and ensure that the euro remains a cornerstone of trust and a driver of European sovereignty.
15:28Thank you very much.
15:30Thank you very much.
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