Moulin: Digital euro essential for monetary sovereignty
Banque de France Governor Emmanuel Moulin emphasized the necessity of a digital euro and wholesale CBDC to maintain monetary sovereignty in the evolving digital landscape. Speaking at VivaTech, Moulin outlined Europe's strategic response to integrate innovation with stability.
Digital payments reshape monetary landscape
The monetary landscape is undergoing significant transformation, driven by two simultaneous shifts in retail payments and wholesale settlement.
Cash usage is declining, while digital payments, particularly card and mobile transactions, are rapidly expanding.
France, for instance, recorded nearly 33 billion cashless transactions in 2024, a 5.2 percent increase, with cards dominating 62 percent of non-cash payments.
Concurrently, financial assets are being tokenised, representing them as DLT-recorded tokens.
This process is a logical evolution, streamlining operations by integrating messaging, reconciliation, and asset transfer.
Tokenisation promises substantial efficiency gains, reducing settlement times and transaction costs, and enabling advanced mechanisms like smart contracts in cross-border transactions and securities markets.
Stablecoins threaten monetary sovereignty
Digitalisation introduces new risks to monetary sovereignty and financial stability.
Europe's retail payments heavily rely on non-European card schemes, which dominate nearly two-thirds of euro area transactions.
Stablecoins exacerbate this, risking dependence on non-European infrastructures and non-euro settlement assets.
Their market capitalisation grew from under USD 5 billion in 2019 to USD 300 billion in 2026, predominantly dollar-backed.
This poses a serious risk of digital dollarisation and money privatisation, potentially weakening monetary policy transmission and raising financial stability concerns.
Europe must actively shape innovation, not merely absorb it.
Digital euro: A necessary anchor
The speech clearly outlines a proactive strategy to extend the euro into the digital world, which is crucial for preserving trust and sovereignty.
While ambitious, this approach is a pragmatic necessity to counter the risks of digital dollarization and maintain financial stability.
Its success hinges on effective cooperation and a robust regulatory framework.