The combination of those 3 trends is translating into activities and services that first swept into the payment sector and are now spreading more broadly. Among them, socalled decentralized finance, DEFI, is emerging as a crypto-based alternative to traditional finance, where the provision of services is claimed to be disintermediated and their governance decentralized, and is enabled notably by permissionless blockchains, smart contracts and decentralized apps. Digital innovation therefore acts as centrifugal forces: they aim to create a movement of decentralisation that runs counter to the traditional architecture of the monetary and financial edifice, centralised around trusted institutions –the central bank, credit institutions and market infrastructures-. Second, these decentralisation forces might have a two-sided impact on the functioning of our financial system, both in terms of efficiency and stability. 1/3  BIS - Central bankers' speeches  From an efficiency perspective, they can bring in particular more transparency, costefficiency and availability around the clock. But they bring also a risk of fragmentation of processes, if the blockchains are not interoperable and cannot also smoothly interact with legacy, centralised, clearing, settlement and payment systems. From a stability perspective, it is clear that currently the crypto ecosystem is not large enough and interconnected enough to threaten the stability of the whole financial system, as shown by the modest impact on mainstream finance of last year's turbulences, in the wake of the Terra-Luna and FTX conglomerate collapses. But these collapses did have significant negative spillover effects within the crypto ecosystem.

Denis Beau: The perils and potential of digital currencies Introductory remarks (virtual) by Mr Denis Beau, First Deputy Governor of the Bank of France, for the panel discussion on "The perils and potential of digital currencies", at the RAID (Regulation, Artificial Intelligence, Internet & Data) Digital 2023 on "Bridging Parallel Lines", 3 May 2023. *** In order to set the scene, let me: Put CBDC and stablecoins discussions and developments into the broader perspective of the transformation underway of financial services and of the financial sector. Highlight the regulatory and supervisory issues they raise from a central banker perspective, from the perspective of an institution in charge of ensuring monetary and financial stability. To do this, I would like to make three points: First, CBDC and stablecoins are the prominent and most publicized output of the 3 major disruptions of finance that digital technologies are bringing about, namely: The arrival of new players, big techs and fintechs, which to date, have been subject to little or no regulation. The emergence of new forms of investment and settlement assets in tokenized form, usually referred to as crypto-assets. Bitcoin is emblematic of a first generation of highly volatile cryptos, whose use remains essentially speculative. The second generation, stablecoins, aims to provide a broader range of services possibly with a global reach, with the support of mechanisms to stabilize their value against sovereign currencies. The emergence of decentralized market infrastructures, based on DLT and blockchains in particular.