Bank of Japan & European Central Bank Dead-Set on Pushing Asset Prices Higher

Bank of Japan & European Central Bank Dead-Set on Pushing Asset Prices Higher

Deeper negative rates for the BOJ while ECB President Christine Lagarde wants to keep fiscal spending this year and into 2022.

European Central President Christine Lagarde said on Wednesday that eurozone states must keep fiscal spending well into 2022 to protect the bloc from permanent damage caused by the COVID-19 pandemic.

Lagarde called on EU leaders to further kick start the $750 billion euro Next Generation EU spending package in an online interview.

These remarks are in line with her pledge for monetary support for the economy earlier this week when she said the recovery is to be supported by

“favorable financing conditions, expansionary fiscal policies and a recovery in demand.”

“It remains crucial that monetary and fiscal policy continue to work hand in hand. Fiscal policy -– both at the national and at the European level -– remains crucial to bolster the recovery,” she told European Parliament lawmakers on Monday.

Meanwhile, another central bank, the Bank of Japan, is considering signaling to take interest rates further into negative territory; short-term rates are currently at -0.1% and 10-year bond yields around zero. The Japan Times, citing sources familiar with the matter reported,

“In a monetary policy review in March, the central bank may make it clear that it will maintain its negative interest rate policy and that it will not hesitate to cut rates further if necessary.”

However, markets see deeper negative rates as an unlikely policy option that is already putting a strain on commercial banks’ profits. Moreover, there is no consensus within the BOJ on the final decision either.

The BOJ plans to announce its tools next month, with BOJ Deputy Governor Masazumi Wakatabe saying last week that they must

“maintain (their) commitment to achieve 2% inflation. Based on the commitment, we’ll be ready to lower nominal rates as needed.”

Governor Haruhiko Kuroda has consistently said that if the BOJ were to ease further, deepening negative rates would be among the options.

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Author: AnTy

The European Central Bank & EC Join Together to Research A Digital Euro Launch

The European Central Bank & EC Join Together to Research A Digital Euro Launch

European Union entities, the European Commission, and the European Central Bank (ECB) will be coming together to discuss the potential challenges that come from the creation of the Central Bank Digital Currency, the Digital Euro.

Within a joint statement from both the Commission and European Central Bank, the aims of their effort were to explore its prospects for public and private sectors:

“The European Commission and the European Central Bank (ECB) are pursuing their efforts towards ensuring a strong and vibrant European digital finance sector and a well-integrated payments sector to respond to new payment needs in Europe.” The ECB will go on to decide whether the project will be put into motion in mid-2021.

“Such a project would answer key design and technical questions and provide the ECB with the necessary tools to stand ready to issue a digital euro if such a decision is taken,” the joint statement reads.

While the ECB officially closed its public consultation phase on January 12th, the news service EURACTIV, a news service centered on EU policy, found that 41% of polled respondents expressed serious concerns. Concerns regarding security (17%) and Pan-European reach (10%) also emerged.

While the European Union has entered the introductory stages of its CBDC, China’s digital currency – the Digital Yuan – has already established itself as the powerful front-runner and sets its sights on a global payments framework based on CBDCs.

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Author: James Fox

Huobi Global Partners With BCB Group; Traders Gain Access to European Fiat On-Ramp

Huobi Global Partners With BCB Group; Traders Gain Access to European Fiat On-Ramp

Crypto exchange giant Huobi Global has announced a new partnership with BCB Group in efforts to link its trading desks to the European banking system, including the United Kingdom.

Seychelles registered crypto exchange will now offer instant euro and GBP settlements to its clientele.

The deal, which was announced on Tuesday, reveals that Huobi’s over-the-counter (OTC) customers can now complete transactions instantly using either the pound (GBP) or euros through BCB’s BLINC network.

In the recent past, crypto exchanges have faced different hurdles in their efforts to establish banking relationships that can provide an interface to the fiat money world. Before the current deal, Huobi had no established European fiat gateway, BCB CEO Oliver von Landsberg-Sadie stated.

Speaking to media outlets, Landsberg-Sadie stated that the partnership would provide a robust infrastructure that will enable seamless trading for Huobi’s customers.

“We’re here to provide that robust infrastructure so that these guys can just get on with trading and know that trades are happening in a way that’s properly monitored, that’s regulatory-friendly.”

Huobi’s head of global business, Ciara Sun, stated that the process has been rigorous and although it took some time it is for the benefit of the firm’s European customers. Sun said,

“Partnering with BCB allows us to offer a European fiat on- and off-ramping service that we know is in line with the laws of that area, but it also allows our customers in Europe to experience a smooth and hassle-free user experience.”

Huobi becomes the latest major crypto exchange using BCB’s BLINC platform, following Bitstamp, which had joined earlier. BCB stated that other partnerships with various crypto exchanges would be announced soon.

Huobi Korea Secures Certification From Korea Internet and Security Agency

Huobi Korea, an offshoot of Huobi Global operating in Seoul, has been certified as an information security management system, or ISMS. The certification complies with Korea’s Special Payment Act.

The certification means that Huobi Korea will be granted a broad management system that guarantees security as well as compliance with Korean laws. The new law requires crypto-based enterprises to report transactions as per the updated KYC and AML policies issued recently.

Huobi Korea CEO, Park Si-deok, said that the issuance of the certificate is a testament that the exchange is well prepared to offer quality services to both institutional and individual clients.

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Author: Joseph Kibe

ECB Experts Maintain a Cautious Approach to Digital Euro Development

The European Central Bank (ECB) has been talking a big game about its forthcoming digital euro, particularly considering its functionality.

However, the agency remains resolute in its stance that it shouldn’t rush an asset and instead move with caution.

Synergy is Required for Optimal CBDC Performance

Earlier this week, several experts from the ECB agreed that a cautious approach would be the best way forward considering the digital euro.

In a panel tagged “Upgrading Money to the Digital Age: Introducing Digital Euro,” participants argued that the primary goal would be to form a consensus on the digital euro and the form it should take.

In the panel, Austėja Šostakaitė, a Market Infrastructure Expert at the ECB and a former Senior Economist at the Bank of Lithuania, explained that the ECB would not be considering a digital euro until the middle of 2011. She wants the ECB to focus on solving the most critical questions on introducing the asset into the European financial ecosystem and how to collaborate it with commercial bank money.

Carl Andreas Claussen, an advisor to the Swedish Riksbank, also explained that the Riksbank is currently working on a proof-of-concept for the e-krona. However, he highlighted that a launch for the asset is “four to five years away.” Claussen highlighted,

“There are some legal questions and this is such a big issue that we cannot decide on this. We need some political backing. We suggested to the parliament that they should have an expert committee looking at this.”

Top ECB Brass in On Board

All opinions appear to be in line with the official stance of the ECB. While it first announced its digital euro in September, the agency has made it clear that it wouldn’t be rushing development for the asset. In an online panel from November 12, Christine Lagarde, the agency’s President, explained that it had chosen to focus on the proper implementation.

Lagarde pointed out that the ECB had set a consultation panel to explore the potential of a CBDC. She added that the panel would give a consultation report by January 2021. This report will help the bank make decisions on whether to launch – and what course to follow. While Lagarde highlighted that she believed a digital euro would come to light, she also understood that everyone needed to agree on the right implementation format.

The President has been an ardent supporter of Central Bank Digital Currencies (CBDCs) for a while. Earlier this week, she explained in an article that the digital euro would help bring the Eurozone into the digital financial age.

Lagarde added that the digital euro could complement cash and ensure seamless access to central bank money. It would surely ensure the maintenance of monetary sovereignty – especially in a future where the use of physical cash declines.

Reuters also reported last week that Olaf Scholz, the German Finance Minister, had called on the ECB to expedite the asset’s development. Scholz, an ardent critic of private cryptocurrencies, explained that there is already significant demand for digital payments across the European Union. As he believes, it is time for the ECB to move swiftly towards developing its CBDC.

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Author: Jimmy Aki

ECB’s President ‘Hunch’ is EU Might Push Forward with CBDC Plans; Decision in January, 2021

European Central Bank (ECB) president, Christine Lagarde, said on Thursday that the EU would make its decision on whether to pursue a digital euro in January 2021. This comes as more jurisdictions pay closer attention to Central Bank Digital Currencies, given the accelerated paradigm shift to virtual payment networks amidst the COVID-19 pandemic.

Lagarde shared her sentiments during the virtual ECB Forum on Central Banking. In-attendance were other prominent monetary authority figures, including the Fed Reserve chair Jerome Powel and Andrew Bailey, Bank of England governor.

While all the three figures commented on the ongoing developments in CBDC, Lagarde hinted that the EU might decide to move forward with a CBDC, although the decision will be made collectively. She stated that,

“We might well go in that direction … My hunch is that it will come.”

Lagarde was also keen to highlight that the ECB is not in a race to be the first but rather seeks to derive value from a CBDC. She noted that if the CBDC option is fast, cheap, and highly secure, then the ECB should explore the possibilities of joining other nations that have forged ahead with CBDC plans.

“If it is going to contribute to better monetary sovereignty, a better autonomy for the euro area, I think we should explore it. If it is going to facilitate cross border payments, which are very laborious in quite a few corners of our big world, then we should explore it.”

Per Lagarde’s time-frame estimates, a digital euro will take at least 2-4 years before it is finally launched. This will allow the ECB to adequately prepare and get it right once the project is ready for mainstream adoption. Some of the ECB issues are still trying to figure out include Anti-money laundering, terror-financing, and users’ privacy.

Notably, the ECB intensified its efforts in CBDC research this year and recently published a report on the possibilities and implications of a digital euro. The central bank also applied for a trademark the name ‘digital euro’ as part of its effort to hedge, should it chose to roll out a CBDC.

The Fed Chair & Bank of England Governor’s Takes

Jerome Powel, who also shared his comments during the virtual policy panel, said that the U.S is committed to looking at the ‘potential costs and benefits of a central bank digital currency.’ However, he reiterated that it is more important to get it right than being first, especially with the U.S dollar’s position as the world’s reserve currency.

Andrew Bailey, the BoE governor, touched on private stablecoins in what seemed to be a warning to issuing authorities. According to him, the bar is very high for stablecoins, given the users’ expectation of value certainty. In fact, he went on to highlight that the bar or answer might actually be CBDCs.

“They haven’t met that bar in my view. And it may be that the answer to that bar is actually central bank digital currency.”

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Author: Edwin Munyui

BlockFi Eyes European Market in Q1 2021; Excludes the UK Due to Regulatory Uncertainty

BlockFi, a crypto lending service, is eyeing the European retail market with an expected product launch in Switzerland, Italy, and the Netherlands by the first quarter of 2021. The crypto lending firm has already begun the trials for the launch in Italy. However, to many people’s surprise, BlockFi has excluded the United Kingdom from the list despite having several London offices.

David Olsson, Blockfi’s vice president for Europe and Asia, shed some light on the launch of their retail products in the European market and said,

“They’re large enough markets that it’s worth our while to go in and put the resources to work to get traction there, and there is also the regulatory certainty that they’re more pro-crypto and it’s a stable regulatory environment.”

The crypto lending firm said that they are only focusing on institutional clients in the UK for now. The reason for excluding the UK could also be attributed to the latest crypto regulation update in October made by the Financial Conduct Authority (FCA). The October update prohibited offerings of derivative crypto products to retail investors.

While the October update does not impact BlockFi, the firm is currently observing the country’s retail market and regulatory policies surrounding it. The crypto lending firm believes it’s too complicated at present to roll out an elaborate business model in the country.

Olsson said that the October ban on derivatives offering for retail investors would hamper the future of crypto services in the country. He said that the ban looks like “it’s putting crypto on a different footing to equities,”

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Author: Silvia A

EU Draft Proposal Seeks to Access Data from End-to-end Encryption Platforms

The European Union (EU) could soon limit end-to-end encryption according to a draft leaked by the German Presidency, which seeks to increase the monitoring efficiency by Intelligence authorities and police.

This development comes in the wake of Vienna’s terrorist attack that took 4 lives and left 23 others with injuries. The news, which was initially reported by an Austrian media dubbed ‘FM4’, noted concerns on the accessibility of data from encrypted platforms like WhatsApp and Signal.

According to a draft deciphered by the Associated Press, this proposed piece will harmonize the process of accessing encrypted data,

“Competent authorities must be able to access data in a lawful and targeted manner, in full respect of fundamental rights and the data protection regime, while upholding cybersecurity.”

The draft, which is dated Nov 6, goes on to highlight those technical solutions to enable data access in encrypted platforms must be in line ‘with the principles of legality, transparency, necessity, and proportionality.’ However, it is quite noteworthy that the draft proposal does not call for total encryption; instead, it is set to initiate an exploratory phase that will guide stakeholders, including the EU, towards adopting favorable legislation in matters of end-to-end encryption.

Activists Decry the Move

As expected, the draft has already been met with opposition from rights activists who place fundamental importance on privacy and security. In fact, a German lawmaker Anke Domscheit-Berg, a left-wing politician, has voiced their concerns about the proposed draft. The lawmaker accused EU governments of masking under the extremism narrative to introduce higher surveillance within their jurisdictions.

According to Anke, the logic of accessing end-to-end encryption platforms does not make sense. He gave this example to support the argument,

“Anyone who finds an open back door into my house can enter it; the same is true for back doors in software …

The proposed EU regulation is an attack on the integrity of digital infrastructure and, therefore, hazardous.”

It appears he is not the only one who has called out the draft proposal; other stakeholders that have voiced their opinions against it include the executive director of Open Privacy Sarah Jamie Lewis and the director of Cybersecurity at Electronic Frontier Foundation, Eva Galperin. With the document set for presentation to the EU council on Nov 19, only time will tell if this draft will be adopted into law by member countries.

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Author: Edwin Munyui

Binance Boosts Visa Card Incentives with Auto Top-Up, Daily Cashback & Higher Spending Limits

Binance has added some perks to its recently launched debit card rolled out in the European Economic Area (EEA) one month ago. The crypto exchange is looking to expand its footprint in the retail market as more crypto users opt to have a good part of their portfolio stored in digital assets. Binance’s Visa-branded card is designed to facilitate a seamless conversion to fiat when making payments.

With over 60 million outlets accepting Visa payments, Binance card users can leverage this service to make online payments. The exchange is yet to integrate a prepaid function for PoS payments but is currently in the product pipeline. Notably, the crypto card service by Binance is part of a growing niche as more merchants move to accept crypto payments.

Binance has now increased the incentives for using its crypto card; the exchange introduces a ‘daily cashback’ reward program instead of the ‘one-week’ initial arrangement. This means that users will be getting their rewards daily, making it more attractive to use the Binance card more frequently.

As for cashback reward rates, Binance has bumped the figure to 8% from 7%, which was initially set as the maximum amount. Binance crypto card users whose purchases are eligible for the cashback rewards can expect an 8% cashback that could be cashed out daily. It is quite noteworthy that the cashback reward program favors BNB holders, depending on the amount they hold.

Besides the cashback incentives, Binance raised its crypto card’s spending limit to €870 per day. The crypto exchange anticipates that it will further raise this limit upon scaling the physical card mainstream use in the future. An automatic top-up feature has also been integrated to make daily deposits seamless.

The Binance crypto card touts zero maintenance, subscription, and transaction fees, apart from 3rd party charges where they apply. Users can currently deposit funds into their pre-selected Binance digital wallets to use them via the exchange’s crypto card. However, it remains scanty whether Binance will ultimately feature withdrawals, contactless payments, chip, and PIN tech within the physical card.

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Author: Edwin Munyui

European Central Bank (ECB) Must be Ready to Issue a Digital Euro, Says Board Members

ECB board member Fabio Panetta said on Friday that the European Central Banks should be preparing to issue a digital euro.

In a study published on Friday, the ECB said a digital euro could help an environment where citizens have abandoned cash, other means of payments became unavailable, or foreign forms of electronics have taken over.

“We should be ready to issue a digital euro if and when developments around us make it necessary,” said Panetta in a post accompanying the study. “This means that we already need to be preparing for it.”

Open for public consultation that will start Oct. 12; the ECB has given itself until the mid of next year to decide whether to go forward with the project, which would start with an “investigation phase.”

“Our role is to secure trust in money,” said ECB President Christine Lagarde. With this, she means making sure “the euro is fit for the digital age,” and should the need arise, be prepared to issue its digital version.

Digital euros will give holders a direct claim on the central bank and could be transferred directly between users — typically an option only for governments and commercial lenders, making them safer than any deposits.

As it has implications for financial stability and monetary policy, the ECB report urged to assess whether a digital euro should be accessible by firms and households directly or indirectly via intermediaries.

The ECB also said deposits in digital euros might be capped and subject to its interest rate on deposits, which is minus 0.5% currently. Instead of just by the ECB, they would also be offered by the private sector, it said in the study.

A digital euro “is becoming an obligation which, indeed, central banks — need to carry out,” said ECB Vice President Luis de Guindos in an online discussion on Friday.

In a sign that ECB is serious about a central bank digital currency, it applied to trademark the term “digital euro” last week.

While the People’s Bank of China is already working on the testing of its CBDC, the US Federal Reserve and the Bank of England are still discussing the possibilities around the digital version of their respective fiat currencies.

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Author: AnTy

ECB Files for a ‘Digital Euro’ Trademark as Central Banks Turn Focus to CBDCs

The European Central Bank (ECB) filed an application last week to trademark the name ‘digital euro’ as the CBDC craze gains momentum. A report by Bloomberg revealed that the ECB applied for the ‘digital euro’ trademark through its German-based legal representatives, Bock Legal. This development comes barely a week since ECB president Christine Lagarde confirmed that the regulatory body is exploring the potential benefits and downside risk of issuing a ‘digital euro.’

Speaking at the European Parliament, Lagarde highlighted that the EU is yet to make a decision on whether it will issue a digital euro. However, she was also keen to note that the bank is actively exploring the CBDC space as per its mandate in monetary oversight,

“We are exploring the benefits, risks and operational challenges of doing so … We have a duty to play an active role in balancing the risks and benefits of innovation in payments, so that money continues to serve Europeans well.”

While a practical digital euro phase may take some time, the move by ECB to trademark this name further shows the underlying potential of CBDC disruption. A newly released report by Deutsche bank estimates that around 80% of the world’s central banks have already embarked into some CBDC activity, even if its minimal research. In Europe for instance, Italy and France have already committed to participating in a digital euro-pilot.

China on the other hand is setting the pace for a tokenomics dominance, having begun the digital yuan pilot back in April. This initiative had been ‘under the hood’ for close to five years but was only piloted post-lockdown. People’s Bank of China (PBoC) is in charge of the digital yuan ‘e-RMB’ and intends to gradually replace fiat currency in circulation as part of scaling its monetary effectiveness in the age of cryptocurrencies.

Other jurisdictions that are likely to be at par or slightly behind China include the Bahamas and Thailand. The former is set to launch its CBDC ‘Sand Dollar’ this month while Thailand has partnered with Hong Kong to build a cross-border CBDC. This initiative is currently in the second phase where ConsenSys is set to lead product development, working alongside PWC and Forms HK.

Also Read: Fed Researching CBDC & Planning to Deposit ‘Digital Dollars’ Directly To the Digital Wallets of Americans

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Author: Edwin Munyui