ECB’s Villeroy: CBDC a Stability Anchor; Commercial Banks Must Not Fear

6 May 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Monday said that commercial banks must not be afraid of central bank digital currency (CBDC), as its primarily role was to contribute to financial system stability.

In a speech at the BIS Innovation Summit 2024, Villeroy, who heads the Banque de France, said, ‘The way we make central bank money available has to be geared to the 21st century to ensure that central bank money maintains its fundamental role: this role is not to be the dominant means of payment, but a stability anchor for the financial system.’

‘This is why I believe that, sooner or later, we will need a CBDC for wholesale as well as for retail purposes. We are preparing accordingly at the ECB and the Banque de France; and commercial banks need not be fearful’, he elaborated.

Money was and would still be a public-private partnership that needed to evolve according with the times, he said.

In that context, it was important to follow innovation with humility and openness and to reflect on it in an integrated manner, he said.

‘[C]entral banks must rapidly start adopting new technological innovations – including AI – in a rational, clear-headed and controlled way’, he said.