The central banking world seems to be warming up to the ever-evolving realm of blockchain technology, with figures such as Denis Beau, the first deputy governor of Banque de France, heralding Central Bank Digital Currencies (CBDCs) as the very foundation of a new-grade global monetary system. According to Beau, the inherent value of CBDCs should not be confined to local financial settlements, but instead broaden the spectrum to spearhead cross-border payments. While this aligns with the prevailing sentiment amongst his colleagues, he places a strong emphasis on developing these digital solutions with key utilities in cross-border payments from the outset.
However, he expressed some brushes of skepticism. Along with the optimism, Beau acknowledged the potential risks embedded in the crypto domain- an aspect that requires a balance between promoting technological advancement and maintaining financial safety. These reservations call for a harmonious collaboration between the public and private sectors to introduce tokenized assets with better efficiency.
In the age of the global CBDC frenzy, Beau presented a dual pathway for effective realization. The first path would involve creating a symbiosis between wholesale and traditional models- thus forging a new order in the global monetary arena. The secondary proposal would entail constructing CBDCs compliance with established models of the Bank for International Settlements and the International Monetary Fund. With these steps, it could lead to CBDCs integrating an automated market maker in every nation involved in the transactions.
Despite some early successes with digital currencies, the French authorities remain stringent about digital asset regulation. This action results from the high-profile industry collapses and scams orchestrated by malicious actors in the recent past. Therefore, it is clear that single jurisdiction regulations, such as the upcoming Markets in Crypto Assets (MiCA) regulation, might not cut it effectively.
At the heart of these developments, Beau highlighted Project Mariana, a collaborative venture involving the Banque de France, the Swiss National Bank, and the Monetary Authority of Singapore. This project trialed payment settlement and cross-border utilities using hypothetical virtual currencies of the involved countries. Despite its experimental nature, Beau warned against misconstruing the disclosure as an endorsement of a particular blockchain or digital currency. The bottom line? Project Mariana and CBDCs alike are part of an ongoing exploration, with much progression ahead before any solid advancements are laid in stone.
Source: Cryptonews
