At the recent World Economic Forum in Davos, the tension between traditional banking systems and Bitcoin re-emerged, as key executives and policymakers discussed the balance between regulation and innovation in the realm of digital finance.

The governor of the French central bank, François Villeroy de Galhau, argued that trust in money must arise from regulated public institutions rather than private cryptocurrencies. He claimed, “The guarantee for trust is independence on the central bank side,” suggesting he placed greater faith in central banks with democratic mandates than in private Bitcoin issuers.

These comments were met with a vigorous response from Brian Armstrong, the CEO of Coinbase, who argued that trust should ultimately rest with the users. He stated that Bitcoin operates as a decentralized protocol free from central authority, thus holding an independence that even central banks cannot claim.

Armstrong suggested that Bitcoin and central banks should not be rivals, but rather coexist in a competitive space, a notion that prompted some amusement from Galhau. He remarked, “I think it’s a healthy competition because if people can decide which one they trust more, it’s a substantial accountability mechanism regarding deficit spending.”

While Galhau maintained a preference for the regulation and oversight of central banks, he acknowledged the potential of private participation in the financial system, noting that money has historically operated as a public-private partnership. He believes that tokenization could play a beneficial role, provided it aligns with established regulatory frameworks.

He concluded with the assertion that “Regulation is not the enemy of innovation. On the contrary, it is a guarantee of trust.” Further, he assured banks that the EU’s digital euro aims to enhance payment systems without undermining private sectors, emphasizing the need for preserving monetary sovereignty.