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.
