To open this webinar, I would like to share with you some thoughts on this ambivalence of cryptoassets from the point of view of a central banker and a supervisor: First, the challenges and opportunities of crypto-assets development. Second, what we are doing at the Banque de France to address these challenges. 1. Challenges and opportunities The world of the blockchain and crypto-assets is still an immature ecosystem: it is difficult to predict in which direction and in which scale it will develop, but the emergence of many use cases related to decentralised finance, the creativity of the ecosystem, point to many opportunities. In particular, one can imagine that the innovations being developed will improve our payment systems, especially for cross-border transactions, or also securities issuance and settlement mechanisms... The main challenge is therefore to ensure that the emergence of crypto-assets and, more generally, decentralised finance contribute to the effectiveness and security of our financial system. Because this nascent ecosystem is also a source of many risks. The international work of public authorities highlighted these issues from the risk of money laundering to the risk of the consumer or investor. I would like to highlight one of them: the risk related to the network effect. This risk was mentioned when some Bigtechs considered creating supra-national “currencies": by offering to an extremely large customer base, these projects raised questions about monetary sovereignty of the states, as well as serious questions about the functioning of competition.
While the economy was tentatively getting back on its feet, inflation in the euro area dipped below 2% at the end of 2013 and continued to fall from there. At the beginning of 2015, it slid into negative territory, giving rise to concerns about whether inflation expectations were well anchored (cf. chart 13). In June 2014, the ECB lowered its main refinancing rate to 0.15% and its deposit rate to below zero. Today, they are at 0.05% and –0.3% respectively. In lowering the interest rate into negative territory, the ECB followed the example of Danmarks Nationalbank, which had already introduced negative deposit rates for banks in 2012. The primary goal of the ECB was, however, not the same as that of Denmark (which was to reduce capital inflows); instead, it sought to increase inflation by stimulating lending.6 From mid-2014, the ECB sent ever clearer signals that it would be substantially easing its monetary policy. At the same time, there were increasing signs that the US Federal Reserve would be exiting its zero interest rate policy. Against this backdrop, the euro began to depreciate considerably not only against the US dollar, but also against the pound sterling. Between mid-2014 and the beginning of 2015, the euro lost almost 15% against the pound and more than 20% against the US dollar (cf. chart 14). A phase of general euro weakness set in.