var TRINITY_TTS_WP_CONFIG = {“cleanText”:”Banque de France governor proposes EU-focused DLT network for asset tokenization.u23f8As the European Union (EU) moves toward a digital euro launch, Banque de France Governor Franu00e7ois Villeroy de Galhau has proposed a regional outlook for tokenization based on distributed ledger technology (DLT).u23f8In hisu00a0speechu00a0at the 2023 Paris Finance Forum on July 5, Villeroy outlined a pan-European DLT infrastructure for tokenized settlements. The central bank executive stated that the architecture will support the settlement of a wide range of tokenized assets in the EU region.u23f8Villeroy noted that multiple DLT infrastructures have the unintended effects of clogging the settlement process, stifling industry innovation. Under his proposal,u00a0central bank digital currencyu00a0(CBDC), tokenized bank deposits, and other digital currencies may be exchanged for value under one network.u23f8u201cProviding a tokenised settlement asset could also be rounded out by a European infrastructureu2014in the euro areau2014that would bring together all tokenised assets (CBDC, deposits, financial assets), to guarantee interoperability between the different assets as well as the singleness of the currency,u201d Villeroy said.u23f8The central bank governor cited a similar idea pushed forward by the Bank for International Settlements (BIS) in June, revolving around APIs to link several networks. However, critics poked holes in the plan as one that placed a premium on centralization and failed to address privacy concerns.u23f8u201cBringing together central bank money, commercial money, and different assets on the same platform, all tokenised and interacting, opens up a whole new range of possibilities,u201d Hyun Song Shin, BIS Head of Research,u00a0saidu00a0at the time.u23f8Villeroyu2019s proposal bears similarity with au00a0submissionu00a0from the International Monetary Fund (IMF) dubbed XC. The IMF could eliminate the need for wholesale CBDC developments since it creates a u201cglobal centralized ledger for cross-border paymentsu201d through tokenization.u23f8EU lays the groundwork for tokenizationu23f8The EU has been closely monitoring developments within the DLT sector as it braces itself for a tokenized securities pilot regime based on the technology.u23f8In June 2022, the EU completedu00a0legislation to give legal backing to a planned pilot program for financial markets. Designed to run for three years, the pilot will explore tokenizing stocks, bonds, and a wide range of financial assets.u23f8Not to be left behind, the Bank of England (BoE) has hinted that it could beu00a0pivotingu00a0toward the tokenization of financial assets, given the myriad benefits to be gained.u23f8Watch: Patrick Prinz discusses BSV blockchain adoption in Europeu23f8″,”pluginVersion”:”5.6.2″}; |
As the European Union (EU) moves toward a digital euro launch, Banque de France Governor François Villeroy de Galhau has proposed a regional outlook for tokenization based on distributed ledger technology (DLT).
In his speech at the 2023 Paris Finance Forum on July 5, Villeroy outlined a pan-European DLT infrastructure for tokenized settlements. The central bank executive stated that the architecture will support the settlement of a wide range of tokenized assets in the EU region.
Villeroy noted that multiple DLT infrastructures have the unintended effects of clogging the settlement process, stifling industry innovation. Under his proposal, central bank digital currency (CBDC), tokenized bank deposits, and other digital currencies may be exchanged for value under one network.
“Providing a tokenised settlement asset could also be rounded out by a European infrastructure—in the euro area—that would bring together all tokenised assets (CBDC, deposits, financial assets), to guarantee interoperability between the different assets as well as the singleness of the currency,” Villeroy said.
The central bank governor cited a similar idea pushed forward by the Bank for International Settlements (BIS) in June, revolving around APIs to link several networks. However, critics poked holes in the plan as one that placed a premium on centralization and failed to address privacy concerns.
“Bringing together central bank money, commercial money, and different assets on the same platform, all tokenised and interacting, opens up a whole new range of possibilities,” Hyun Song Shin, BIS Head of Research, said at the time.
Villeroy’s proposal bears similarity with a submission from the International Monetary Fund (IMF) dubbed XC. The IMF could eliminate the need for wholesale CBDC developments since it creates a “global centralized ledger for cross-border payments” through tokenization.
EU lays the groundwork for tokenization
The EU has been closely monitoring developments within the DLT sector as it braces itself for a tokenized securities pilot regime based on the technology.
In June 2022, the EU completed legislation to give legal backing to a planned pilot program for financial markets. Designed to run for three years, the pilot will explore tokenizing stocks, bonds, and a wide range of financial assets.
Not to be left behind, the Bank of England (BoE) has hinted that it could be pivoting toward the tokenization of financial assets, given the myriad benefits to be gained.
Watch: Patrick Prinz discusses BSV blockchain adoption in Europe
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