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. users may de facto be captured by an ecosystem and have no choice of their payment service, or at least be 1 / 3 bis central bankers'speeches influenced by bigtechs to use their services at the expense of competitors. but the opposite risk exists : payment system fragmentation, which can lead to a deterioration in the service to users. central banks have a long experience with these issues, especially in the field of payments. in this respect, the balance of cooperation and competition between industry players, in other words “ co - opetition ”, has proven to be historically valuable. one of the challenges now is to maintain these “ co - opetition ” relationships over time, ensuring that they can include all players and coordinate effectively the payment systems ( and ecosystems ) – traditional or innovative. 2. the banque de france ’ s action to help meet these challenges, at the banque de france, we develop our actions along two lines : ( i ) the first one is to support and implement regulatory frameworks and supervisory practices that promote both innovation and the stability of our financial system most of the current regulatory framework was designed before the technological “ breaks ” that we now face. it therefore seems logical to adapt it to these technological changes and to the challenges and risks associated with them. the same applies, of course, to our supervisory framework and methods. in terms of regulating crypto - assets, france pioneered the establishment of a legal framework in 2019, with two objectives : creating legal certainty and trust to promote the development of a healthy and innovative ecosystem ; preserving innovation by being careful not to curtail further development opportunities and risk depriving the economy of beneficial innovations. with these two objectives in mind, we also support the european project for markets in cryptoassets ( mica ), which will, in particular, provide a first harmonised eu - wide regulatory framework for stablecoins. ( ii ) be involved

corporate sector and to allow more flexibility of the exchange rate. furthermore, capital account liberalization efforts have been affected by some actions implemented recently to tackle pressures on the renminbi, particularly those derived from tighter capital flow regulations and enforcement, such as restrictions on the purchase of foreign currency by individuals and more strict limits on outbound foreign direct investment flows. 2. the domestic authorities have taken important steps towards the liberalization of the onshore renminbi ’ s exchange rate over the last few years. however, the overall framework still falls short of a fully supply and demanddriven renminbi market, and failing to effectively fill this void may continue to raise concerns about the possibility of government control over the currency ’ s valuation, particularly vis - a - vis the us dollar, for either stabilization or stimulative purposes. it is also important to consider that the transition to a more market - oriented foreign exchange regime may be difficult and subject to wide swings. indeed, the challenges deriving from a complex external environment are accentuated by domestic developments as the chinese authorities attempt to simultaneously achieve multiple relevant tasks, including a diminished role of the state in the allocation of resources in the economy, a shift in the growth strategy towards consumption and services and away from investment and manufacturing, as well as the tackling of a number of outstanding vulnerabilities. against such a backdrop, global investors may remain wary of trades in the renminbi. 3. while significantly developed over the last years, the domestic financial markets still need further depth, transparency, and sophistication, while the insufficient degree of connectivity with the global financial system continues to be reflected in low levels of foreign participation. this is observed across virtually all relevant markets. china ’ s stock exchanges figure among the world ’ s largest in terms of market capitalization, but foreign ownership at only slightly above 1 percent pales in comparison to those in other emerging markets such as brazil ( 30 percent ) and russia ( 23 percent ). likewise, china ’ s bond market, the world ’ s third largest, as attractive as it may be in terms of returns and risk, is dominated by domestic participants, as foreign participation remains low at around 2 percent. 10 of course, this is explained to a large extent by outstanding restrictions to foreign participation in domestic financial markets but, in light of their current features, it is reasonable to assume that demand factors may also be present. see zhang, z. et al. ( 2017 ) : “ china