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The payment landscape is currently dominated by a bank-based ecosystem, an interchangeable use at par, of commercial bank and central bank money as settlement assets, and an anchor role for central bank money which is the sole settlement asset with legal tender status. It is certainly an understatement to say that this landscape may be significantly altered given technological developments and changes in consumer preferences underway. As these developments and changes unfold, both the « front-end » arrangements that ensure the interaction between the payer or payee and the payment service provider, to initiate or receive payments, and the « back-end » arrangements that transfer information and funds between the payer and the payee, will change.
For the time being, in spite of their rapidly growing number and variety, crypto-assets only account for a marginal share of assets held by economic agents. In October 2019, according to CoinMarketCap, total outstanding crypto-assets represented EUR 205 billion globally; in comparison, the euro area's M3 monetary aggregate amounted to EUR 12.5 trillion in August 2019.
In addition, the diversity of views on the contributions that crypto-assets can make to the efficiency and safety of our payment systems mirrors the one in their forms. Some see crypto-assets as a disruptive innovation poised to radically change the way our monetary and financial system operates, and changing it for the better. Others believe that for the time being they do not provide a new and attractive answer to the classical trilemma payments solutions face between low cost, high execution speed and low risk, and would change the way our monetary and financial system operates for the worse.
Speaking from the perspective of a central banker and a supervisor mindful of the benefit of innovations but also of the risks they could bring to financial and monetary stability, Mr Beau focused his remarks on:
1- whether and how crypto-assets can contribute to improve our payment systems,
2- the public policy challenges they raise, in particular for central banks, and how to address them.