French central bank deputy governor, Denis Beau, stated in October that Central Banks will be in trouble with the new blockchain technology and cryptocurrencies. However, during a recent speech, he also revealed that, if properly adapted, Europe would benefit greatly from blockchain technology.
During his speech at the Annual Capital Markets Technology and Innovation Conference (AFME) on the 21st of November, the first deputy governor of the Banque de France, the French Central Bank, supported the new blockchain technology. Denis Beau called for action in bringing distributed ledger technology to Europe as it would innovate and greatly boost the continent’s capital markets.
Beau mentioned several innovative solutions, such as tokenization, that blockchain technology offers:
“The tokenization of financial assets combined with the recourse to blockchain-based solutions and more broadly Distributed Ledger Technologies to store and transfer those assets could help answering market demands,” stated Beau during his speech.
Apart from optimizing the market and economy through tokenization, blockchain technology may potentially create gross and delivery-versus-payment processes, resilience, cross-currency settlement, and operational incident-based recoveries, listed the deputy governor.
Furthermore, he stated that the Eurosystem, the monetary authority of the eurozone, is interested in experimenting with disruptive technologies as they could help with the conditions under which central banks provide money as a settlement asset.
More importantly, Beau stated that the French Central Bank is interested in blockchain technology itself by saying:
“We at the Banque de France, are therefore quite open for experiments in that direction, together with the ECB and other central banks of the Eurosystem, in particular with regard to a wholesale Central Bank Digital Currency.”
However, Beau also believes that the process of implementing new technologies should not be taken lightly, as they bring their own unique challenges. Settlement processing could be hit by “disorderly approaches” and “heterogenous adaptions of market infrastructures” if the technology is not adopted properly.
Only last month, Beau had claimed that traditional financial institutions might be hit heavily by blockchain technology and cryptocurrencies.