Denis Beau: Opportunities and challenges of the tokenisation of finance Introductory statement by Mr Denis Beau, First Deputy Governor of the Bank of France, at the European and American Chamber of Commerce event, New York City, 17 January 2023. *** Digitalisation is far from being new in the financial sector, but tokenisation based on DLTs may be a new turn. In my initial remarks I would like to explain why, at the Banque de France and the ACPR, from the standpoint of our financial stability mandate, we have a strong interest in the development of tokenised finance, and how it impacts the policy tools we use to fulfil our mandate. I/ The tokenisation of finance is of prime interest for two main reasons: 1/ It is part of the significant transformation drivers of our financial landscape Indeed, digital technologies are profoundly transforming finance, ushering in a wave of new players at the crossroads of IT and finance, digital assets in new, tokenised form-usually referred to as crypto-assets, for investment and settlement, and new exchange and settlement infrastructures. Their combination is translating in activities and services that first swept into the payment sector and are now spreading more broadly. Among them, so-called decentralised finance, DeFi, is emerging as a crypto-based alternative to traditional finance where the provision of services is disintermediated and their governance decentralised, and is enabled notably by permissionless blockchains, smart contracts and decentralised applications (Dapps).
The new European DLT pilot regime, which will come into force in March this year, will allow us to continue our experiments within the boundaries of a simplified regulatory framework. At the same time, the Banque de France is contributing to the reflection on the possibility of a retail CBDC: this is currently what Eurosystem central banks have embarked on, under the ECB aegis, with the ongoing investigation phase for a digital euro. The evolution of the payment landscape leads us to reflect on the ways in which citizens can have access to central bank money, also in the digital world. Let me conclude in saying that tokenization can be a blessing or a curse for the functioning of the financial system. It is my belief that we can collectively make the best of it if we ensure its expansion within a framework of confidence in which good regulation has an important role to play. 3/3  BIS - Central bankers' speeches