Bank of France Chief Says Bank Closely Monitoring Stablecoin Space
Bank of France’s governor Francois Villeroy de Galhau has hinted that the bank has closely followed and taken an interest in crypto industry’s stablecoins.
The BoF chief’s views are part of his wider comments on the sector as reported by Bloomberg in an article published on May 14.
In the report, Villeroy clearly noted that the Bank of France has shown great interest in emerging networks. Of particular interest are those that are progressively developing new technologies that help users exchange stablecoins, utilizing them to purchase tokenized securities or to pay for goods and services.
In his view, there is a very clear-cut distinction between stablecoins and cryptocurrencies. He said that stablecoins are unlike other crypto assets that are used for speculative purposes.
Pointing out bitcoin as one of the speculative assets, Villeroy noted that stablecoins were “more promising.”
During the 2017 Beijing conference held in Beijing, China, Villeroy strongly expressed his views concerning bitcoin- which he has often been outspokenly critical of in recent times.
He said that there is no way bitcoin could be a currency or a cryptocurrency in that matter. He warned that Bitcoin (BTC) is a speculative asset and investors ought to be warned because its real value can’t be established. He said it was also extremely volatile and had no economic value.
He added that since no one was really “responsible” for bitcoin, those who decide to invest in it should do so “at their own risk.”
The same sentiment came from Mario Draghi, a fellow banker who is likely to share a lot in terms of financial philosophy with Villeroy. Draghi is the president of the European Central Bank (ECB) that counts the Bank of France governor as one of its governing council members.
He supported Villeroy’s argument that bitcoin isn’t a currency, referring to it as “a risky asset.”
In Draghi’s opinion, a token that is not backed cannot be a currency and even wondered who was behind such cryptocurrencies.
Stablecoins are not like bitcoin and many other crypto assets. These tokens are called so because they are pegged to assets like gold or such other stable assets, and can also be made ‘stable’ through an algorithm.
Many stablecoins are fiat-backed, meaning their value is tied to that of a specific fiat currency. For instance, the controversial Tether stablecoin USDT is tied to the value of the U.S. dollar.
TrustToken has released a range of tokens pegged on various global fiat currencies, including the U.S. dollar (TrueUSD), British pound (TrueGBP) and Canadian dollar (TrueCAD).
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.