French central bank officials have raised concerns that the growing dominance of privately issued stablecoins could pose a long-term threat to monetary sovereignty, particularly if dollar-backed tokens become the foundation of global tokenized finance. Speaking at the World Economic Forum, Banque de France governor François Villeroy de Galhau said tokenization should not be viewed only as a technical upgrade to financial markets but as a structural issue tied to state authority over money. He warned that widespread adoption of private stablecoins could accelerate dollarization, especially in emerging economies, weakening the ability of governments to conduct independent monetary policy. While acknowledging that tokenized systems can lower costs and improve settlement efficiency, he stressed that money remains a public good linked to democratic accountability rather than a purely commercial product.
Villeroy de Galhau said Europe’s response is to reinforce public market infrastructure through central bank-backed digital settlement systems rather than competing directly in retail payments. France and other euro zone authorities are prioritizing wholesale central bank digital currency pilots designed for interbank and capital market settlement, aiming to preserve a public anchor in an increasingly tokenized environment. The concern, he noted, is not innovation itself but who ultimately controls the financial rails. If private issuers based largely outside Europe dominate tokenized money, countries could lose influence over liquidity conditions, financial stability, and crisis response tools. From this perspective, regulation is intended to preserve trust and continuity rather than slow technological progress, ensuring that efficiency gains do not come at the expense of policy autonomy.
Industry leaders offered a contrasting view, arguing that private stablecoins and tokenized assets expand access and competition. Coinbase chief executive Brian Armstrong said stablecoins have already demonstrated real-world utility by enabling faster, cheaper transactions and offering an alternative store of value where confidence in local currencies is weak. Ripple chief executive Brad Garlinghouse framed tokenization as a bridge between traditional finance and blockchain networks rather than a replacement for sovereign money, emphasizing the need for clear rules. The debate highlighted a growing divide between policymakers focused on control and stability and crypto firms pushing for open, competitive financial systems.
