2022 paris europlace international finance forum – paris, 12 july 2022 central bank digital currency ( cbdc ) and bank intermediation in the digital age speech by francois villeroy de galhau, governor of the banque de france page 1 sur 7 ladies and gentlemen, it is a great pleasure to be with you today, thanks to paris europlace. in light of the current geopolitical context, the theme of this session appears particularly relevant : european strategic autonomy is not absent from our sight as central banks. we notably ensure that our banking system remains robust in times of great uncertainty – namely the war in ukraine, and its economic consequences : the spur in inflation, the deterioration of the macroeconomic outlook, and the normalisation of interest rates. in this context, let me pay tribute to the solidity and performance of the french banking system : french bank ’ s cet1 amounts to 14. 9 % in q1 2022 ; while their roe increased over a rolling 12 - month period at 7. 6 % in q1 2022, and corporate risk remains manageable for sure. however, this collective strength should not mean any complacency, especially in the face of the triple digital revolution unfolding before our eyes in the financial sector ; i new tokenised assets, new players, and new “ decentralised ” market infrastructures aim to remodel the financial system from the ground up. against this background, central banks are increasingly considering the creation of a digital form of their currencies. and let ’ s face it : the idea sometimes raises doubts, and even fears, among commercial banks. the part of the project which is quasi - consensual, with strong use - cases, is the one which raises little public interest – which does not mean that it is not key : wholesale cbdc. i will come back to this later. but let me start with the other face of the cbdc mountain : retail cbdc ; this one, by contrast, is the focus of both public excitement and private questions. i. a ‘ retail ’ cbdc for a renewed intermediation in the digital age let me suggest three hopefully shared principles to climb together this face of the mountain. 1. our means of payment are and must remain a partnership between central bank money and commercial bank money page 2 sur 7 until now, the coexistence and partnership of central bank and commercial bank money has structured the retail payment landscape and

preserved the stability of the monetary system. their respective roles are clearly assigned : central bank money anchors the stability of the financial system while the multiplicity of issuers of commercial bank money preserves competition and innovation. their interplay and their interchangeability at par value ensures the safety and efficiency of the monetary and financial system. neither one is better than the other, but in a joint venture each partner needs the other : a digital euro should never mean disappearance of commercial bank money ; conversely, digitalisation cannot mean the disappearance of central bank money. indeed these foundations – and especially the role of central bank money – are increasingly threatened by the digital revolution of the financial sector. first, it results in the decline in the use of cash in transactions, which calls into question the availability of central bank money for the public. increased reliance on digital payment solutions also shows how our european ecosystem has become critically dependant on non - european players ( eg international card schemes and bigtechs ). meanwhile, the emergence of crypto - assets and so - called stablecoins may compete against both commercial and central bank money, even though they do not offer the same guarantees in terms of credit risk and safety : the recent collapse of the terra - luna ecosystems or the sudden liquidity shortage of celsius network are necessary wake - up calls. i strongly welcome here, on the last days of a fruitful french presidency of the eu, the successful trilogues on transfer fund regulation ( travel rule ) and markets in cryptoassets ( mica ). 2. even if the precise use cases are not yet definitively fixed, there are several material reasons to consider the issuance of a digital euro the main rationale for a digital euro is therefore to preserve the role of public money in a digital economy. such means of payment, adapted to the demand of users in the digital age, would ( i ) preserve the accessibility and usability of page 3 sur 7 central bank money, ( ii ) support our monetary sovereignty, and limit the risk that “ external ” digital assets – be they cryptos or non - european cbdc – would be used as settlement assets in the euro area, ( iii ) support the strategic autonomy of the european continent – and hopefully contribute to the emergence of a pan - european payment solution e. g. the european payments initiative, which could be used as a vehicle for the distribution of a digital euro. in the light of these challenges, and under the leadership of my board colleague