Politique monétaire : les leçons et alertes de François Villeroy de Galhau pour 2026

Mr. Director, dear Louis, dear Natacha, and dear students, thank you for these very warm words of welcome. And I won't hide that I have a real emotion in finding the Boutmy Amphitheater again. So indeed, I was never in your place, but I was often in this one. It was between 1996 and 2005. An era that may seem calm in retrospect, but I have very fond memories of teaching economic policy here.

So tonight, I am going to talk to you about a part of economic policy, which is monetary policy. I know the subject may seem technical, but I will aim to be clear rather than complex. And it so happens that since we agreed on this appointment two months ago, dear Louis, monetary policy has become a burning issue again. Two months ago, we were settled in what was called the good position of 2+2, 2% inflation and 2% interest rates, and monetary policy seemed almost boring.

But today, the role of a central banker is to decide in uncertainty, to distinguish information from noise, and to remain credible. I note that it is not insignificant to speak about this at Sciences Po, where public policy must be both technical, yes, but also a matter of judgment, trust, and institutions. We will talk a little about all of that.

So, the war in the Middle East since early March places us immediately with a question that is apparently simple. Apparently, and I will start with that one. Are we reliving 2022 with an energy price shock following a military attack, followed by an inflationary surge that in 2022 was, as Natacha reminded us, unprecedented for decades? That is the apparently simple question. I will then come to an even less simple question. What should we do now?

So, are we reliving 2022? The answer at this stage is no. But this 'no' must be explained because it guides both our diagnosis and our action. Certainly, the shock seems significant, as you can see on the screen on the left regarding oil. It so happens that the price of gas was lower before the February 2026 shock than it was in February 2022.

But we are not in 2022 mainly for another reason, because the macroeconomic situation is different. The economy of the eurozone, like that of France, is not today facing the imbalances from the exit of the Covid pandemic. The strong, remember, strong demand for durable goods, notably in the United States, with very strong budgetary support during the Covid period, coupled with supply chain tensions, fueled inflationary pressures. We have perhaps forgotten the figures, but I will remind you, in February 2022, inflation in the eurozone was nearly 6%, 5.9%, and over 4%, 4.2%, in France. In February 2026, we start with inflation of 1.9% in the eurozone and even lower in France, 1.1%.

There is another difference, which is the orientation of monetary policy. We are not today, unlike in early 2022, subject to any constraint, any commitment linked to asset purchases, the famous QE, to forward guidance, that is to say, advance commitments not to touch interest rates, which was widely practiced before 2022, or to the proximity of what is called the effective lower bound in English, the lower bound of interest rates. We were at -0.50% interest rates, we estimated that we could not lower them.

I add that the normalization of monetary policy that we have conducted since 2022 has led to a significant reduction in the size of the ECB's balance sheet in a gradual and predictable manner. A better starting position, a good starting position. And allow me, I believe, to emphasize that this is largely due to the sequence that we, the European Central Bank, I will sometimes speak of the eurosystem, the sum of the European Central Bank and the 21 national central banks, including the Bank of France, the sequence that we went through between 2022 and 2025.

In 2022, let us also remember, many feared that a recession would be necessary to reduce inflation. It was even one of the great questions posed to monetary policy. And yet, disinflation was achieved without a recession. Activity slowed down but did not collapse. We maintained positive growth. Labor markets, as you can also see on the unemployment curve, held up, and above all, inflation expectations remained well anchored.

So why do I emphasize this sequence? Not simply as a historical reminder, but because I believe it taught us two very useful things for today, for this shock we are facing. First, supply shocks. We have a supply shock, but not all supply shocks are the same. Shocks on energy prices, for example, spread to the prices of other consumer goods like food. But for energy-importing countries, which we are, they translate into what is an implicit tax imposed on the consumer from abroad, which attenuates demand for other goods. And so that is a counter-effect that is rather disinflationary.

And then there are differences between sectors. Tensions in the transport of goods have transitory effects, rapid but transitory, whereas a shortage of intermediate goods has medium-term repercussions. The lesson of 2022, therefore, the first lesson, is that a supply shock is not necessarily durably inflationary. It all depends on its propagation, and I will often return to this notion. The issue is not only the initial shock on energy prices or supplies, but its progressive transmission to the domestic components of inflation, wages, service prices, underlying inflation, another expression I will use, that is to say, inflation excluding energy and food.

So, there is a second lesson from what we have experienced. It concerns the credibility of the central bank. And here, I will talk about the famous inflation expectations. When these expectations, whether those of households or businesses, remain well anchored, close to our 2% target, it is not necessary for the central bank to react excessively by aggressively raising interest rates. This credibility is established, expectations being well anchored, monetary policy can react without haste, without applying a mechanical reaction.

So, what would be a mechanical reaction? You have probably heard of the Taylor principle, named after the American economist John Taylor, who recommends setting policy rates above inflation. And even in the Taylor rule, there is a fairly direct arithmetic translation. In the original rule, policy rates must be increased by 1.5 points each time inflation increases by 1 point.

When expectations are well anchored, a virtuous circle can form because agents believe in our determination, expectations remain better oriented, and because they remain better oriented, disinflation is less difficult and therefore less costly in terms of activity and employment. And I believe this is a very important explanation of what happened after 2022. Why a disinflation without recession? Because, as you can see on this graph, we associated differently with monetary policy. Monetary policy gestures, monetary policy signals, even if they were of relatively moderate scale, contributed to slowing, to breaking the rise in inflation expectations.

Credibility is therefore not a comfort supplement for central banks. It is a concrete determinant of the effectiveness of monetary policy. And this expectations channel, you have probably learned that the traditional channel of monetary policy is via demand, via credit. This channel has not disappeared, but I insist on this second channel of expectations, which profoundly changes the economics of disinflation.

So, how does this apply today? The memory of the recent 2022 shock, which is still vivid, can nevertheless have an ambivalent effect. What do I mean by that regarding expectations? On the one hand, this memory can make price and wage-setting behaviors more reactive. Economic agents have the recent inflationary episode in mind and their expectations may be more sensitive, react more quickly to a new energy shock.

On the other hand, which is a positive effect, this same memory also recalls the success of monetary policy after 2022. Central banks demonstrated their ability to bring inflation back to target quickly. That is why 2026 is at this stage different from 2022, but we remain extremely vigilant.

So, I come to my second question, which is, based on this analysis, what should we do now? Our good position, an expression we used a lot on the Governing Council until a few weeks ago, but I had often said that our good position was never, in the great uncertainties of the present times, a comfortable position. But we find ourselves today, let us recognize it, in a more uncomfortable situation for two reasons. We are facing very high uncertainty and we have to deal with a negative supply shock. And if you will allow me, I would like to return to these two challenges. The first being that of uncertainty.

So the American economist Frank Knight, as early as 1921, is famous for having distinguished risk from uncertainty. And you probably know this distinction, which is very useful today. Risks, we can quantify them. Uncertainty, it is unquantifiable. The Iranian crisis illustrates incontestably an environment where probabilities are poorly defined, where non-linear reactions are possible, notably from markets, and where reactions to this can be very volatile, excessive, and rapid.

So, in such an environment of uncertainty, the use of multiple scenarios is a valuable tool. This is exactly what we had planned well before the conflict because we had included it in our monetary policy strategy review published last June. Our decisions, I quote, must take into account not only the most probable trajectory, but also the risks and uncertainties surrounding it, notably through scenario and sensitivity analysis. End of quote. We are there today. Hence the three scenarios published by the ECB on March 19.

I will try to move forward. And the Bank of France on March 25, we adopted the same scenarios. So, I will comment on them a little bit based on the graph you have on the left. I will do it based on the price of oil. You could derive it from the price of gas on the right. The baseline scenario, which is in black, would be a significant but temporary shock with limited diffusion and expectations that remain anchored.

A more unfavorable scenario, you can see it above in terms of the oil price curve, which is in purple, would see a wider diffusion with second-round effects. This famous propagation to which I will return. The price of oil would then reach nearly 120 dollars per barrel in the second quarter of 2026. And then there is finally a very unfavorable scenario, which is in red. It is less probable but it would combine a higher and more durable shock with an increase in financial market volatility. You can see that the price of oil would reach 145 dollars per barrel. We are quite far from that today and especially when I look at the red curve, it would remain subsequently durably at higher levels, at more than 100 dollars per barrel until 2028 inclusive. That is not what future markets are telling us, but I believe it is important to have differentiated scenarios of this type.

So I note, we have put the current oil prices, it is the blue curve, between the black and the purple. So, there is obviously great volatility on oil prices depending on declarations, but current and future oil prices exceeding 100 dollars per barrel today brings us above the baseline scenario to the intermediate scenario that I qualified as unfavorable.

How to identify the most probable scenario? Monitoring the indicators is obviously decisive and as Christine Lagarde highlighted during our last Governing Council on March 19, we are first closely monitoring the evolution of commodity and energy markets as well as the possible reappearance of supply bottlenecks. You just made the parallel with 2022.

So there, we are talking about economic data. I would like to emphasize that uncertainty also imposes increased vigilance on financial stability and financial variables. What do we see since early March? A tightening of financial conditions in the markets. Investors have revised upwards, we will move to the next slide, have revised upwards the profile of policy rates with two to three rate hikes expected by the end of this year. Market rates, as you can see on the left, have risen significantly on short maturities. So, we look, for example, at what is called the ESTR, which is the overnight interest rate reference in the eurozone, and you can see that in 2 years, it increases by about 70 basis points compared to what was forecast at the beginning of March, it is the bottom curve and then the top curve. On the right, we have put long-term rates, the 10-year composite rate in black, which has also increased very significantly.

And so, even before any monetary policy decision, part of the financial tightening is already at work. I note when I look at long-term rates and if we move to the next slide, that 10-year rates have risen more in countries showing signs of budgetary fragility. These are the famous spreads that you find on the right. They have risen in France, unfortunately, and even more so in Italy and the United Kingdom.

I note in passing, this fragility itself imposes great restraint on any possible budgetary support measures. That too is a difference with 2022.

So, this market movement that I just described, it does not coincide with the current action of the central bank since we decided on March 19 to maintain our rates at 2%. This movement results from both an upward revision of inflation expectations, anticipated interest rates, and an increase in risk premiums. If this shock were to last, the risk would be to see this financial tightening spread to other segments. And there, I will cite a few market pockets, notably in the United States. Equity markets, the debt of the most fragile companies, certain sovereign bond markets, and then the actors of what is called non-bank finance, funds and notably hedge funds, including the famous private credit about which we have heard a lot in recent months.

This propagation effect via interest rates on more sensitive market pockets could lead to financial instability. We are obviously very attentive to financial stability as well, but this tightening can also pose another decisive question, that of transmission to the financing of the economy via a tightening of credit conditions offered to households and businesses.

So that is the set of variables we look at to deal with uncertainty. And I insisted on this scenario method. I come to the second challenge I mentioned, which is a challenge for action. We are facing a negative supply shock. And a negative supply shock pushes inflation up and slows activity because it also compresses real income and demand. And there, I put back before your eyes the economic forecasts for France on the left, for the eurozone on the right, associated with the three scenarios. First the baseline scenario, then the unfavorable and very unfavorable scenarios, and we have put at each time growth, real GDP, and HICP, which is the Harmonized Index of Consumer Prices, the inflation index valid across the entire eurozone. So you can see the effects, they are all in the direction I described, that is to say, less growth and more inflation. Their amplitude depends obviously on the scenario in which we are.

What is the difficulty for the central bank? It is not to let inflation run away without overreacting to a shock that, moreover, slows the economy.

So, I will specify a little bit what our responsibility is, and I believe it is very important to make this distinction between first-round effects and second-round effects. What do I mean by that? Our responsibility obviously does not concern the price of oil or gas taken in isolation. We do not set it at all. Our responsibility is more about how this energy shock will or will not transmit to underlying inflation, excluding energy and food, to expectations, to financial conditions, and ultimately to price stability in the medium term.

To put it perhaps in more technical terms, we often talk about the central bank's reaction function. Our ECB reaction function remains based on the three criteria we have clarified since 2023, with notably my colleague and friend Philip Lane, who is the chief economist of the ECB. Inflation prospects including expected inflation, that is total inflation, underlying inflation excluding volatile shocks on energy and food, and then the transmission of monetary policy. That is what we have been saying with great consistency since 2023.

So I will specify a little bit our reaction function today. Faced with the current supply shock, our attention is particularly focused on the first two legs I cited. The issue is beyond the initial shock on energy, its transmission to the domestic components of inflation, wages, service prices, inflation excluding energy and food. That is where persistence lies. And we are therefore today particularly attentive, I return to expectations, to business price expectations, notably through a tool that is public. Our monthly business surveys of the Bank of France, which have proven in recent years to be excellent indicators of the frequency and magnitude of price revisions, what is sometimes called in non-economic terms the price tag waltz. What are the intentions of businesses following this energy shock? We also follow household inflation expectations alongside those of businesses, as well as wage indicators.

To summarize all this, I would say that monetary policy is therefore played out in two rounds. There is, in the first round, to appreciate as best as possible the intensity and duration of the energy shock, I have spoken about it, but above all to limit the propagation of this shock through second-round and indirect effects.

So, how can we apply this to the very latest developments? And you can testify with me that there is great volatility in the declarations of certain political leaders and information on the conflict. So, I will try to step over this daily volatility and I would like to make four remarks.

The first is obviously that the prolongation of the conflict is negative. I said it, today we are April 2nd, it can change, we are closer to the intermediate unfavorable scenario than to the baseline scenario retained by the Governing Council on March 19. You saw earlier that we were between the two but a little closer to the intermediate unfavorable scenario.

Second remark, is that we now have since Tuesday the inflation figures for March, the first month affected by the shock for the eurozone and for France. They confirm a strong first-round effect. Energy increased by nearly 5%, 4.9% exactly in the eurozone. And consequently, total inflation is brought to 2.5% in the eurozone and 1.9% in France. I remind you that we were at 1.1% in France in February. So these are not yet very high absolute levels, but it is obviously a strong increase given the energy shock.

Now regarding second-round effects, underlying inflation excluding energy and food, of which it must be remembered that energy is only 9% of the French consumer price index. If I also remove food, everything that is services and manufactured goods represents the bulk, 73% of the price index. These figures are not very well known but they are very important. This underlying inflation, services and manufactured goods, has remained at this stage well controlled at 1.3% in France and 2.3% in the eurozone.

So, however, and this is my third remark, and you can see it on the screen, the greatest vigilance is required. Market inflation expectations, which are the only ones we have for now, have risen sharply. So, you can see it obviously on the price of oil, we talked about it but you can see it on the two black curves, it is inflation expectations in 2 years and inflation expectations in 5 years. The effect is especially noticeable at 2 years.

And then our macroeconomic models can underestimate certain microeconomic chains of events. What do I mean by that? Which would be more negative? Breakdowns of certain supply chains on plastic or other petroleum-derived products and the temptation of companies even in other sectors than those directly affected by the initial shock to preempt price increases.

Fourth and last remark, it is very premature to anticipate a calendar for ECB rate hikes, but it is clear that we have the capacity to act when necessary and as necessary. Obviously, the next change in policy rates now has a strong chance of being an increase.

So, before concluding, I would like to dispel a misconception that is not directly linked to the Middle East and oil shock. But this misconception, you may have heard it in recent months, would consist of saying that European monetary policy is not suited to France since it has the lowest inflation in the eurozone. So first, I would like to state an obvious fact, monetary policy targets the eurozone as a whole because we have the great advantage, very much supported by our fellow citizens, of having a single currency, and it does not target a single country.

And in France, the recent low level of inflation, and you can see that it remains so in relative terms, including in the forecasts I showed you, is an asset. It is an asset for competitiveness and it is an asset for purchasing power.

This relatively low level is explained by specific factors and partly transitory ones. The evolution of electricity prices, which fell in February 2025, and then French characteristics from the previous shock, lower exposure to gas. Incidentally, a favorable factor for France this time, unlike 2022, is that we have regained nuclear-generated electricity, whereas this production was very constrained in 2022. There was the price shield, there is a higher frequency of wage negotiations, hence a faster disinflation in services. Wage moderation is today greater in France than elsewhere because wages adjust each year to inflation.

But above all, comparing a 10-year rate to the instantaneous inflation of the last month is not the economically correct calculation. To judge the relevant real rate over 10 years, one must subtract the inflation expected over these 10 years, over the next 10 years. Now, at 5 or 10 years, French inflation expectations are anchored more or less to the same reference as eurozone inflation.

So, I arrive at the conclusion by taking up the title of my intervention, which I had called 'Navigating in a World of Uncertainty.' So, Edgar Morin said it beautifully. He was not a specialist in monetary policy, but I believe he often deserves to be quoted at Sciences Po. We try to surround ourselves with as much certainty as possible. But living is navigating in a sea of uncertainty through islets and archipelagos of certainty on which we resupply.

So, I will extend this pretty marine metaphor. We obviously do not command the wind or the sea. We do not choose geopolitical conflicts. We do not choose the navigation conditions or their consequences on the price of oil. But we central banks know the starting point and the destination.

At the start, I said it, a good positioning and significantly less inflationary pressure than in 2022. At the destination, we have an unwavering determination to stabilize inflation at 2% in the medium term, which is our objective. Our course remains clear. Price stability, we guarantee it to European businesses and households. Price stability because it is our mandate and because it is the expectation of our fellow citizens. We saw it very strongly in the post-2022 inflationary episode. So citizens expect it in the service of purchasing power, in the service of confidence in the currency, and in the service of the strength of our economy.

Between 2023 and 2025, it was possible to bring inflation back to target without causing a recession. This time more than ever, believe me, we will act if necessary, without haste but without hesitation. And thank you very much for your attention.

So first, I totally share the spirit of your question. Allow me to broaden the answer a bit and then I will come to a more targeted response. One of the great risks of this succession of shocks we are experiencing, because today it is an energy shock, but if I look back since 2020, I could go back even further, there was Covid, there was the invasion of Ukraine by Russia, tribute to President Zelensky who, if I understand correctly, preceded me here. There was the wave of inflation, then the dissolution in France, the re-election of Donald Trump and the protectionist shock, etc. One of the great risks is that our economic policies, and I see that our leaders are under pressure everywhere, go from emergency to emergency and that we lose sight of the medium-term goals and necessary transformations. Why do I say that? Because obviously the long-term response to be much less dependent on these energy shocks that return periodically is the transition to non-fossil energies, whether renewable or nuclear.

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I think we need to move beyond this debate. Europe doesn't produce fossil fuels. So if there's one subject where ecology and economics clearly meet, it's the energy transition. We need to accelerate it. Yet, look at the budget debate in our country for the moment—I can understand it—it's about whether we should subsidize gas purchases or not. We're missing the real answer.

Now, we're not on the same time scale. To give a more targeted answer to your question: have we reduced our energy dependence since 2022? Yes. Yes, for several reasons. First, there's a general movement, fortunately, of decarbonization in our businesses and our economy. It has continued, it hasn't accelerated since 2022, but it has continued. I note in passing, by the way, that we at the Bank of France are preparing an economic assessment of France over a longer duration, and this is one of the subjects where the French economy has an advantage in traversing a transition. We are rather more decarbonized than others, but we are not at the end of this process.

And then there are more cyclical factors that are objectively more important. Dependence on Russian gas was much stronger for certain European economies than dependence on oil and gas from the Gulf today. You can see, by the way, that the immediate effect is more severe in Asia than in Europe because the dependence index is not the same. And then the very favorable factor for France, as I said, is that we have regained our nuclear electricity production capacity. But we are not today, we are even quite far from a situation where we would be freed from this dependence. So, aim for the medium term and the transition.

Those are two great questions. How much time do I have? [Laughter] On the first question, when we were in different conditions, I happened to say that perhaps there was room for a rate cut. But that's not an objective in itself. Our compass, I repeat, is inflation around 2% over the medium term. There can be temporary deviations, but it's extremely important that we provide this anchor for inflation expectations and for economic life.

So if I dared, I would say your question has almost Trumpian overtones, but that's off the record. No, because there's quite strong pressure, and not just from the leader I just cited, generally from political leaders on the central bank to say, indeed, cut our rates because it will be much more pleasant for economic life. It might be more pleasant in the short term, but it's totally ineffective and even counterproductive in the long run.

Because what happens if you pursue a monetary policy that's too accommodative relative to the inflation target? First, markets generally lose confidence, and so what you gain on the short-term rates side, you lose on the long-term rates side. This leads, in technical terms, to a flattening of the yield curve. Why? Because markets fear the return of inflation. Yet, most of the investments you're talking about are generally financed over the long term, whether it's housing for households, business investment, or the energy transition.

So guaranteeing that inflation will remain controlled is rather what favors investment financing. And then the other perverse effect is that it risks leading to a return of inflation, and that is extremely bad for growth. I take this opportunity to say it because there's often this idea of a trade-off between inflation and growth. In the 70s, a period I must be about the only one here to have known—no, Natacha surely not, and none of you. If I turn to Xavier Debrin, who is the chief economist of the Bank of France and who was born—but no, all jokes aside—Xavier comes from Belgium. That's, if you will, the European commitment of the Bank of France. We have a European chief economist who is not French.

Until the 70s, there was this extremely strong idea of the trade-off between inflation and growth. And we realized in the 70s already that this conventional wisdom had taken a serious hit through the episode we called stagflation. It was when we had both too much inflation and stagnation or very low growth. And I believe that today, the idea of the trade-off doesn't hold up. Again, there can be favorable short-term effects, but maintaining controlled inflation—which isn't zero inflation, our target is 2%—is a condition of confidence, and confidence is always the first ally of growth.

If you need proof that isn't macroeconomic or economic, but is social and political, look at the allergy to inflation shown by all our advanced societies since 2022. An incredible social and even electoral sensitivity. So, you don't boost growth, or even less investment, by easing up on the inflation front.

Now, on the question about stablecoins, I could be very long, but I'll try to be fairly brief. First, stablecoins associated with—I don't know if there are specialists among you in tokenization—I always express myself with caution, but it's a positive technological revolution. Tokenization, based on blockchain, and if I may say, from the time we've been hearing that blockchain will revolutionize things, here we have a real use of blockchain. The history of finance has always been about how you settle the face-to-face between cash settlement and delivery of the security.

Or the delivery of ownership of a property or the delivery of a commercial good. If I look at international trade, there's a central question of trust because obviously the seller prefers to receive the money before delivering the good, and the buyer is the opposite. So, pardon me for making this hyper-simple gesture to summarize tokenization: tokenization is settling these two flows simultaneously and even through a token thanks to blockchain technology. That, I believe, is extremely positive.

The risk we have is that this revolution of tokenization is conducted primarily through non-European hands. Let's be clear, largely American, but there may also be Chinese hands. These are the famous dollar stablecoins you spoke about. And I believe we must have a European response to that. So we need euro stablecoins or tokenized bank deposits in euros. It's not very different, but that's tokenized private money. And then we also need an anchor of tokenized public money. That's the famous digital euro or central bank digital currency.

The implicit in your question is: should we choose between the private tier and the public tier? I don't think so at all. You always need both. When you look at the history of money, there has always been a public anchor. In the era of paper money, it was the banknote, and then there's private money that develops and you use it widely through your credit card, your mobile, etc. But today, we're changing technology, we must not change philosophy. You always need the public anchor and private money.

I sometimes regret that the European debate is framed in terms of private-public opposition. I think that makes no sense. It's about the complementarity of the two. And I repeat that if we had a European war, I believe we're fortunately moving beyond it, it would only have one winner: the Americans. Our issue isn't the private-public divide in Europe. Our issue is the transatlantic divide on payment sovereignty related to tokenization. I hope I've answered your question.

On the second part of the question about alternatives, I hope I answered when I said it's the European strategy with a central bank digital currency and even tokenized. On the retail side, what we call the digital euro. And for interbank or financial transactions, it's much less known but at least as important. I'll point it out, it can be a small element of European pride: the ECB will be the first major central bank in the world to deliver a digital currency for financial transactions. It's a project called Pontes, delivery next summer, this year. And then above that, you need the tier of euro stablecoins and/or tokenized bank deposits. And it's complementary.

But I'll come back to the first part of your question: what are the risks if we don't do this? I think Europe has woken up and we will respond as we should. But fundamentally, I'll translate the question by saying: what's the use case for stablecoins? And if there were only private dollar stablecoins, what would happen? I don't know if you have the figures in mind, I'll speak under Natacha's supervision. If I look at the outstanding amounts globally of stablecoins today, it's relatively limited. We're between 250 and 300 billion dollars. These are obviously very large absolute sums, but when I look at the size of the planet of finance, it's marginal.

It just so happens that these 250 or 300 billion are 99% in dollars today and issued by non-European institutions. Not always American. By the way, it's in American currency. They're private institutions. There's no public digital money in the United States. Mr. Trump has even banned it. But the two major stablecoin issuers—I'll cite proper names—are Tether and Circle, which for the moment are not incorporated in the United States. They will doubtless be sooner or later.

But the real question is: why is it today 99%? The answer is partly what I just said—it's issued by non-European actors—but above all it's the use case. The current main use case for stablecoins is to serve as bridge platforms with the crypto world. If you want to arrive in usual fiat money, you go through stablecoins, and the crypto world is very largely in dollars, 99% dollars.

Are there other use cases for stablecoins? That's a question that's still open, so I'll make some bets with you. First, there's everything related to cross-border payments, and I think this use case is emerging. I don't know if some of you have looked at cross-border payments for businesses and even more so for individuals—today it's very inefficient. What we call correspondent banking, money transfers, are generally still costly, slow, etc., even if progress is being made. Yet, transferring money via stablecoin can be a completely secure way, as I was telling you.

Another use case is financial transactions. I think this use case will arrive fairly quickly. Why? Because many securities today are starting to be tokenized. I don't know if you've read in the press in recent days, there's a new French stock exchange that will do the first IPO, introduction of an entirely tokenized security. It's not very complicated to tokenize a share or tokenize a bond with all the associated informational content. And there, I believe this use case will develop quite rapidly.

Already, imagine that financial transactions in Europe don't take place in euros—that, in relation to your question, would be a very great risk. Hence the importance of the central bank digital currency, this PES project for financial transactions. And then, step by step, once you're on financial transactions—which are no longer cross-border, they're domestic in Europe—you can arrive at transactions for businesses and perhaps even one day for individuals. There, I'm engaging in monetary fiction, but perhaps one day you'll buy your car with an exchange of a gray card as soon as there's a title of ownership, perhaps even a property.

If I dared a formula, blockchain and tokenization is a form of digital notary. Now, the notary provides many other things, but everything that requires legal security can have the potential to go through tokenization. And there, you see, as for the direct crypto platforms, there isn't a colossal sovereignty issue. With the use cases I've just developed for you, it's obviously vital that they remain predominantly in euros.

Perhaps one last remark on this, for those of you who may have looked: everyone agrees on the current volume of stablecoins. When you ask about the volume of stablecoins in 2 or 3 years, 2028-29, including in the United States, you have an extremely wide range. Some say it will be 500 billion, a bit more than today. Others say it will be 4 trillion, thousands of billions. Why is there such a wide range? Precisely because of this question of use cases I just cited.

But what I say, and what we say with Christine Lagarde and the Eurosystem, is that we can't afford to bet that domestic sovereign use cases won't develop. Hence the importance—I hope I've answered your question, mademoiselle.