In addition, if issuers of stable coins also want to offer banking services such as deposits, financial investments and loans, then they will have to obtain a banking license in all countries where they operate. Otherwise these activities would be illegal. Stable coin projects reveal gaps in existing cross-border payment systems. Hence, at the European level, we should aim at promoting a genuine European strategy for retail payments. Payments are no longer a mere boring back-office technicality. They are innovative, and they provide two strategic assets: data, and daily customer relations. The raw truth however is that the European payments market is already dominated by non-European stakeholders. Furthermore, the growing role of non-European digital firms – be they American or Chinese – offering payments solutions should be taken seriously. Despite the creativity of the European ecosystem of payments, our market remains too fragmented. We don’t have much time left. We – the Eurosystem and the Banque de France – call for the creation of pan-European payment solutions, building on a common brand and on a state-of-the-art instant payment such as the Target Instant Payment Settlement infrastructure (TIPS) managed by the Eurosystem, and contributing to much more efficient international payments including for remittances. Some also suggest that the right answer to Libra is accelerating the creation of a Central Bank digital currency (CDBC). This is a scintillating subject, but a separate one.
In the normal case, a well-balanced monetary policy means that the inflation forecast is close to the inflation target a couple of years ahead at the same time as the forecast for inflation and the real economy (production, employment and unemployment) does not fluctuate excessively. It thus a question of finding an appropriate balance between stabilising inflation and stabilising the real economy and resource utilisation. The Riksbank therefore conducts what is generally referred to as flexible inflation targeting. One might think that it should be enough to simply compare the outcome for inflation with the inflation target when assessing monetary policy. But it is not that simple, for two reasons. The first is that it takes time for changes in the repo rate to have an effect on inflation and the real economy. During this period of time, shocks may occur that can push the economy in a different direction than was forecast. The monetary policy adopted may have been right, but the Riksbank is unlucky and unforeseen shocks lead to inflation deviating from the target. BIS Review 32/2010  1  The monetary policy adopted may have been wrong, but the Riksbank is lucky and unforeseen shocks nevertheless lead to inflation hitting the target. The second is that flexible inflation targeting means that the Riksbank strives not only to stabilise inflation around the inflation target but also to stabilise resource utilisation around a normal level. This can sometimes entail a difficult balancing act.