Category Archives: bank of france

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ECB Chief Reiterates Lack of CBDC Justification

European Central Bank (ECB) president Mario Draghi has reconfirmed to the European Parliament that there are no plans to create a central bank digital currency (CBDC).

Draghi cited a lack of any prevailing economic conditions to warrant such as step, going on to suggest that DLTs hadn’t been severely tested as yet and still required “substantial further development before they could be used in a central bank context”.

The fact that discussions around the world about CBDCs is gaining some impetus hasn’t escaped the ECB or EU financial regulators, particularly in the light of Sweden’s Riksbank considering its own e-krona due to dwindling interest in cash and a rise in the use electronic money in that country.

The ECB, at one time scathing in its condemnation digital currency, has recently demonstrated a change of its stance, even suggesting that cryptocurrencies have a place in the future. It recently suggested that the financial body should begin to “…work on exchanges and platforms which provide services at the interface between crypto-assets and the real economy”. The comments were made earlier this year by Bank of France Governor Francois Villeroy de Galhau who also sits on the ECB’s Governing Council.

Bitcoin’s rising popularity currently feeds the debate globally whether the future direction of money is electronic rather than paper. The ECB chief has suggested however that an ECB digital currency would mean that the central bank would set itself against the banking sector in such a scenario and lead to potentially substantial operational costs and risks.

A view held by some experts is that a CBDC could make quantitative easing more effective bypassing the banking sector, also as a substitute for bank deposits, strengthen the transmission of monetary policy changes to the economy. Such views assert that a CBDC need not be nearly as disruptive as the ECB maintain in its criticism of the concept.

 

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French Regulator Cracks Down on Unauthorized Crypto Platforms

The French independent financial regulator, Autorité des marchés financiers (AMF), has issued a warning to the public that unregulated cryptocurrency exchanges operating in the country are illegal.

AMF is the stock market regulator in France, an independent public body that is responsible for safeguarding investments in financial instruments and in all other savings and investment as well as maintaining orderly financial markets.

According to it, several companies operating without authorization and it has published a list of four transgressors of France’’ current cryptocurrency regulations. Due to recent transparency laws, no investment offer can be marketed in France without approval from the agency.

The websites: bitoraxe.com, solutioncrypto.com, solution-crypto.com, and connect-coin.fr are just four out of 15 that have been recently identified as illegal under French law. Connect-coin.fr has since stopped trading online. Some other websites identified by the AMF, whose role is not just limited to monitoring cryptocurrencies, included one for forex products, one for binary options, and one for other goods including diamonds, wines, and cryptocurrencies.

The AMF as a stock market regulator also handles customer complaints from companies and individuals regarding investment. Recently, it has been increasingly focusing on cryptocurrency issues as digital currency becomes more widely adopted across the country. During the agency’s recent annual report, chairman Robert Ophele commented:

“During the first four months of the year, out of the more than 4,000 requests processed by our Epargne Info-services center, 700 concerned crypto-assets with nearly 250 claims or reports reporting more than EUR 9 million (USD 10.43 million) in losses.”

He added that this is now the most pressing problem that the agency deals with.

France doesn’t expect its legal framework for ICOs to be completed until 2019 and following Bank of France Governor Francois Villeroy de Galhau’s recent comments that new laws are required to cover cryptocurrency exchanges, France is planning to make changes to the current financial law in order to incorporate new technologies, starting with new tax laws governing cryptocurrency announced recently.

 

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