François Villeroy de Galhau: Building tomorrow's payments for Europe and beyond

Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Singapore Fintech Festival, Singapore, 16 November 2023. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and Gentlemen,

I wish to thank my friend and colleague Ravi Menon very warmly for inviting me to speak at the Singapore Fintech Festival. I pay tribute to your twelve years as Managing Director of the MAS, and also to your excellent NGFS Chairmanship. Two years ago, Ravi gave one of his remarkable speeches here, centred on three characters from Greco-Roman mythology: Juno, Plutus and Mercury.i Today I will run through another part of this mythology, starting with Daedalus, the architect of a masterpiece that was built with a special purpose: to imprison and keep at bay the Minotaur – a half-bull beast with a thirst for blood.

Central banks are akin to Daedalus: they are the main architects of our current monetary and financial system. This system was designed to leave room for the private sector to innovate and develop activities that fit well into this global framework, both from an operational and regulatory point of view; this is why we central banks can be seen as the main, but not the sole architects. Our architecture is not set in stone: it has kept evolving, and is set to evolve further, keeping pace with the newest technologies.

And so far, we have been able to do so while avoiding monetary or financial instability, which is "our" Minotaur. Its mere existence had even been more or less forgotten. But the beast has been waking up recently, with the rise of stand-alone and insufficiently regulated financial innovations, among others. First-generation crypto assets, so-called "stablecoins" and DeFI have popped up one after the other; these wild constructions (although to varying degrees) have already led to excessive volatility, insufficient consumer protection, IT vulnerabilities, failures and insolvencies, and so forth, which may spread to the global financial system.