The international monetary system is entering a period of structural change, driven by digital innovation and growing geopolitical tension. That was the message from François Villeroy de Galhau, governor of the Banque de France, in a speech delivered this week at a G7 conference in Paris. For Europe, the warning was also an opportunity: the choices made now on digital money could shape monetary sovereignty for decades.
Villeroy de Galhau described two overlapping disruptions. The first is technological. Tokenisation, digital settlement and new payment rails promise faster, cheaper cross-border transactions, an area where today’s financial system remains inefficient. Yet the same technologies could also reinforce the dominance of the US dollar if dollar-backed stablecoins become the default global digital money.
The second disruption is geopolitical. While the dollar remains central to reserves, trade invoicing and financial markets, trust in the international system is no longer unquestioned. The governor pointed to signs of diversification by central banks and unease over the political use of financial infrastructure. These pressures do not signal the end of dollar dominance, but they do underline why many jurisdictions are seeking alternatives.
The risk of private money dominance
A central concern in the speech was what Villeroy de Galhau described as the risk of “privatisation” of money. If global digital payments are increasingly mediated by private actors issuing their own digital currencies, public authorities could lose influence over monetary conditions, financial stability and consumer protection.
This risk is particularly acute in cross-border payments, where private solutions are moving faster than public ones. Without credible public digital money, stablecoins could become embedded in everyday transactions, potentially reshaping the international monetary landscape in ways that favour a single currency area.
For Europe, this matters not only economically but politically. Payments infrastructure is now seen as a strategic asset, alongside energy or data networks. Dependence on non-European systems creates vulnerabilities in times of stress or conflict.
A framework for public digital money
Villeroy de Galhau argued that innovation itself is not the problem. The challenge is governance. He outlined a policy approach based on balancing monetary sovereignty, financial stability and openness to innovation. Public digital money, including central bank digital currencies, fits squarely within that framework.
This thinking closely aligns with the work of the European Central Bank on the digital euro. The ECB has consistently framed the project not as a response to declining cash use, but as a way to ensure that central bank money remains usable in a digital economy, including online and potentially cross-border contexts.
A digital euro would not aim to replace private payment solutions. Instead, it would provide a public anchor, ensuring competition, resilience and a European alternative to foreign card schemes or global stablecoins.
Why the timing matters
What makes the speech notable is its timing. Legislative negotiations on the digital euro are entering a decisive phase, while global stablecoin regulation remains fragmented. At the same time, geopolitical uncertainty is increasing pressure on countries to secure their monetary infrastructure.
The governor’s message was clear. If Europe wants to shape the future of global money rather than adapt to decisions made elsewhere, it must act deliberately and collectively. Public digital money is no longer a theoretical debate. It is becoming a strategic choice.
For policymakers, banks and businesses across Europe, the implication is that the digital euro debate is about more than payments. It is about Europe’s place in a rapidly changing monetary order.