Deputy Governor of the Bank of France: Encrypted assets have the potential to replace the traditional banking system, stabilizing the currency or will have a systemic impact

According to Cointelegraph's October 16 report, Denis Beau, deputy governor of the French central bank Banque de France, recently commented on the way the central bank treats cryptocurrencies.

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Develop appropriate cryptocurrency regulations

On October 16, Beau delivered a speech at the Official Monetary and Financial Institutions Forum in London, discussing the role of cryptocurrency assets in today's global financial payment system.

Beau said that due to the development of various technologies such as blockchain and distributed ledgers, the traditional banking ecosystem may face major changes, he explained:

“With the advent of so-called crypto assets and stable currencies, and the development of other new settlement assets that we might also see, these assets may compete with the currencies of commercial and central banks, and, according to their sponsors, these Assets are likely to replace the currency of commercial and central banks and become the settlement assets of our payment system center."

Beau continues to say that stable currency with a large potential and a wide range of influences may have a systemic impact, “unpredictable challenges to competition policy, financial and monetary stability”.

Beau added that central banks actually have only three options for solving the cryptocurrency problem.

The first option is to completely ignore the cryptographic assets, but this will not mitigate any potential risks. The second option is to ban all cryptocurrencies. The third option is to establish comprehensive and standardized encryption regulations. Beau said that the third is the most popular choice in Europe and France.

The challenge of establishing standardized regulations

In fact, the lack of standardization of regulations and procedures in the field of cryptocurrency and blockchain is a common problem faced by regulators and industry players. Deloitte, one of the “big four accounting firms”, pointed out in a report last year that the lack of standardization is a major obstacle to the adoption of blockchain.

Riccardo Spagni, the core developer of Monroe (XMR), has previously said that unbalanced international regulatory standards will lead to brain drain associated with cryptocurrencies, as talent in the industry will flow to them. The most favorable jurisdiction.

Legislators in some countries have tried to establish a friendly regulatory environment in their own jurisdictions, act aggressively, seize opportunities, and avoid talent and capital outflows.

Earlier this year, US Congressman Warren Davidson resubmitted the Token Taxonomy Act, which aims to define cryptocurrency as other asset classes that are not subject to US securities laws.