Former BoF Gov: Central Bank Coin Currency At Least A Decade Away

The former Bank of France (BoF) governor Christian Noyer said that a centralized, global eCurrency is still at least a decade away.

Although physical money is being used less and electronic currency is being touted by private entities, there is “clear hesitation” from the top worldwide central banks to launch their own, Noyer told the Financial Times (FT) on Tuesday (Feb. 4).

Facebook’s Libra and the rise of other digital coin currency has central banks looking into launching their own, but privacy issues and overall monetary policy are causing regulators to tread carefully.

“Whether they will enact the projects in the next 10 years remains to be seen,” Noyer said. “I don’t think we are close to the departure lounge, but the fact that they want to study it means a lot of work will continue this year.”

Noyer left BoF in 2015 after serving as governor for 12 years until 2015. He was also vice president of the European Central Bank (ECB) when it was founded in 1998 and is on the board of Setl, a London blockchain technology group.

A January report by the Bank for International Settlements indicated that more than 50 central banks were working on token-based digital money. The central focus is about usage by the general public, not commercial banks settling transactions.

So far, Sweden has trialed a coin called e-krona and Uruguay is running a pilot project for e-peso.

Noyer said central banks “will probably wait to see what the commercial banks are doing themselves,” he said, adding that no policymakers are in favor of the concept of “private money” such as Libra.

A centralized electronic currency for consumers would mean that people would have to open accounts at their respective central banks rather than using a commercial bank. That would put consumer-based responsibility on central banks to monitor activity and prevent illegal activities. This kind of move would also weaken traditional banks’ role as “trusted intermediaries in the circulation of money.”

ECB policymakers met in December to discuss the pros and cons of introducing their own electronic money.