PwC Partner: Central Bank Digital Currencies Need to Be Stress-Tested by Big Companies
Pauline Adam Kalfon, a blockchain and financial services partner at PwC France, explained that central banks may start to accept the idea of issuing their own digital currency once big companies have stress-tested the technology, as noted on Forbes on March 22, 2019.
Still not Comfortable with Digital Currencies
France’s central bank is not planning any move when it comes to digital currencies according to PwC representative Kalfon.
She said that despite several recommendations for further investigations into the matter, central banks are still unsure about issuing their own digital currency. At current, the prospects seem too far-fetched and extremely complicated to deploy.
The PwC partner went on to say that in the case of France’s central bank and the European Union, this may not be the best route, as it would also require the political consensus of all member stakeholders from each member state.
Kalfon noted that since this would be a challenging move for central banks, the best option would be to leave this initial phase of development and implementation to corporations. She mentioned that tokenization of fiat currencies should be first be tested by private groups such as Facebook and JP Morgan and once they have tested the technology central banks could well start their own projects.
“This would reduce the likelihood of potentially negative consequences on the economy arising from any central bank issuing a digital currency. Only then could central banks make a move once digital currencies have been “battle-tested by corporations.”
France and the Crypto revolution
Kalfon considered France one of the most vibrant blockchain ecosystems in Europe with private and public initiatives already planned. The significant investment already scheduled for the country in this matter will be critical according to her.
Apart from several successful startups underway, the French Parliament has been urging the government to put in €500 million into the country’s blockchain development for the next three years, in hopes of elevating France into a Fintech nation comprised of a healthy, talented and insightful businesses with the relevant and diverse skills.
France is also trying to make crypto-mining recognized as an industrial activity. This is already paving the way for private companies to join the field without fear of regulatory crackdown.
As such, France may even become the preferred place for companies coming from the UK that are facing restriction due to Brexit.
Despite regulation still in its infancy when it comes to digital currencies in the country, French authorities are already addressing regulatory concerns so that the challenges to blockchain-related developments can be easily surpassed.
A Growing Space in 2019
According to Kalfon, the upcoming Paris Blockchain Week will be an excellent opportunity for the country to showcase its developments in the cryptocurrency sector and present the country’s leadership to the European industry.
“The underlying rationale is being put into effect to achieve the right balance between investor protection and technology friendliness.”
The French Minister of the Economy, Bruno Le Maire, sent out a warning back in January 2018 about the risks of dealing with cryptocurrencies but by the end of the year, he changed his position by recognizing this new industry would need a pragmatic regulation.
Robert Ophéle, the chair of the Autorité des Marchés Financiers (AMF), the French equivalent of the SEC, last week reinforced this position by saying that it was mandatory to find an adaptive regulatory framework for the sector.
While Kalfon compares this stagnating period in the digital currency industry to the 2001 to 2004 cooling down period of the Internet development followed the NASDAQ crash, she believes that crypto assets have already impacted enough industries despite lacking the legal infrastructure to be an option for central banks.