The French central bank reports that customers have greater faith in banks than in crypto
Governor of France’s central bank, Francois Villeroy de Galhau, believes that the recent events in the cryptocurrency market, which have been characterized by enormous sell-offs, have prompted consumers to place more faith in banks than in digital currencies.
Villeroy said at a session at the World Economic Forum on June 26 that the move may be due to the nature of private cryptocurrencies, which he argued does not inspire confidence. Consequently, he said that people may choose to connect themselves with goods that foster confidence, such as digital currencies issued by central banks (CBDC).
According to the governor, cryptocurrencies are untrustworthy since their value is not backed by a single body. Villeroy said in this paragraph that the trust difficulties will certainly accelerate the growth of CBDCs.
“In recent weeks, people have lost confidence in cryptocurrencies, but more so than in central banks without a doubt…>Nobody is accountable for the value of cryptocurrencies, and they must be recognized globally as a medium of exchange,” he stated.
Having confidence in banks amid rising inflation
Intriguingly, the official insisted that there is still faith in banks despite the fact that most central banks are blamed for the soaring inflation.
During the discussion, Villeroy emphasized the necessity for collaboration between central banks and the business sector in the creation of CBDCs. He proposed that banks serve as guarantors of confidence while the private sector provides the necessary technologies.
Prior to this, the governor praised Bitcoin for providing new technologies, but the organization has maintained a skeptical stance regarding cryptocurrencies.
Notably, the cryptocurrency market has been in the red in 2022, with Bitcoin leading the decline. The leading cryptocurrency is fighting to maintain a price of over $20,000 at now.
The market has made minor increases in an attempt to recapture the $1 trillion market capitalization, while Bitcoin’s value has increased by at least 1 percent in the previous 24 hours to $21,400 as of press time.
In addition to falling prices, the market has been plagued by scandals such as the Terra (LUNA) ecosystem meltdown, which has resulted in substantial investment losses.
The tragedy has prompted doubts about the collapse’s causes. For instance, creator Do Kwon is accused of fraud in relation to the collapse.