François Lefebvre
You may have noticed we have a slight disagreement with our colleague from the Commission, but I will not get back on the details of her arguments. My question is: our colleague Daniel Szmukler mentioned, there have been 180 experiments of retail central bank digital currency, he mentioned the three (Bahamas, Nigeria and China), but all the OECD countries have stopped. So, why would it work and why is it necessary?
Ceu Pereira
In two words: cross- border; comprehensive strategy.
I worked for the World Bank for 10 years. Good. My job was supporting countries to improve their payment systems. And when I saw the experiments at the Bahamas and Nigeria, I thought they are on the wrong path, because the solution was to improve retail payments and not to embark on CBDC.
Every case is different. Why is Europe different? Again, cross-border. We have a big gap in cross- border, and that big gap is why Libra emerged. That is also why now we have stablecoins. This gap has to be filled. I disagree with you that the response cannot be the digital euro, but we do not say that the digital euro is the sole response. We also believe in private initiatives, I will not repeat it enough.
And the other difference with countries like, for instance, China, is that in Europe, we have a comprehensive strategy. We regulate stablecoins. We have one of the most advanced regulations, MiCA. We have the DLT pilot. We are supporting the efforts on the wholesale CBDC, and we are supporting the efforts on instant payments. That is the second difference.
Daniel Szmukler
What I should have said as well is that the EBA working group looked also at the wholesale side of the business. And there, we have found very pertinent use cases that actually banks are looking for. The previous speakers referred to stablecoins, tokenized deposits, bank tokens. What is happening today in the US, in particular because of the of the GENIUS Act, is that the US creates a lot of demand for US dollars, and that is a policy objective. The US want to ensure that the dollar stays a vehicle currency and stays also a key currency in commodities markets and in private trades.
90% of crypto trading today is done via two private issuers of stable coins (Tether and Circle). The duopoly that they are creating around stablecoins is a duopoly that not only reminds me of the duopoly we have here in Europe with Visa and MasterCard, but it also reminds me of the Eurodollar back in the 70s and 80s. The dollar was so strong and the demand for dollars was so strong that it circulated in large amounts in Europe. And I think we are going to experience exactly the same phenomena with stablecoins. Dollar-backed stablecoins will come to Europe, and in the absence of euro-denominated stablecoins or a euro bank token with full reachability, acceptability, fungibility and interoperability as we need it for Europe, we will again create strategic dependency.
Hervé Sitruk
Thanks to all of you.
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