As things heat up around the globe and the global market starts to peak, countries are starting to branch out into different industries to capitalize on the current wealth in the world. The one way to continue progress on a financial standpoint is to continue to develop, optimize, and strategize. France is doing just that with the E.U. Therefore, we are going to discuss why France is looking into creating their own central Bank Digital Currency.
Nothing should be considered investment or financial advice. Enjoy the ride.
France Central Bank digital Currency
This post is inspired by decrypt’s recent article on the topic, which might I add was very well done and detailed. To break it down, the world is starting to slowly feel the pressure of Facebook’s Libra and China’s Renminbi Central Bank Digital Currency.
Basically, what we have developing is the rest of the world is starting to see the utility and purpose behind not only crypto currency, but centralized stable coins. With friction and time becoming more of a focus, the standard ways of cash settlements and banking will not suit a futuristic society that is quickly coming into fruition.
Hence, France’s central bank governor, François Villeroy de Galha, is leading the charge for the country to change this. In short, he is trying to persuade the large institutions, banks, and companies of France to start experimenting with a centralized digital currency that France will operate. All the while, himself and the E.U. are tasked with warding off other stablecoin competitors from the market like Libra to preserve sovereignty.
E.U. Risks Falling Behind
Why would France want to push this project so fast? Well, the answer is simple, competition. When China decided to open the flood gates of one hundred percent promoting blockchain along with Facebook going all in on Libra, the rest of the world woke up.
For years people having been slowly saying, “Blockchain will revolutionize the world. We just do not know how yet.”
In all honesty, that is still a problem. Although, the avenues of use have started to become much more narrowed, and the technology is starting to become widely understood through a decade of exposure and development.
If the E.U. and U.S do not act fast both countries will fall behind the curve. For example, if China implements a universally adopted stablecoin before anyone else, they win. It is similar to the space race; who ever gets there first gets to make the rules.
The Crypto Race
If that makes any sense to you, then you some what get what is happening across the world. The first country to fully implement a working stablecoin that is friction less will get to set the precedent for the rest of the world. Think of it as having the dollar form of a digital currency that your country gets to run and distribute.
If China does this, some of the largest companies in the world will adopt it as a stable reserve. Then they will use it in daily and global transactions, and start to implement it into their business practices.
China Could Win the Crypto Race
This will force other companies around the globe and countries to build infrastructure to accommodate these transactions, because:
Who does not want to do business with China?
Who does not want fee-less and friction-less transactions?
Similarly, who does not want international transactions that can happen 24/7 and not be delayed for a holiday or a weekend, because again, there is no necessary third party?
Easily, anyone can see the potential for a country that accomplishes this feat first. The moon is the limit.
Right now, the race is still open. There is no clear victor, because the technology is not fully capable yet. Although, China seems to be the favorite team for the digital future.