Queen Máxima of the Netherlands comes out in support of digital euro

November 7, 2022 Coin Telegraph

CBDC

"Let us envision that better future and build a digital euro that works for all Europeans," said the queen in virtually addressing members of the European Commission.

Máxima Zorreguieta Cerruti, Queen of the Netherlands, said she was encouraged by the work the European Central Bank had accomplished in its efforts to launch a digital euro.

Speaking virtually at a European Commission conference ‘towards a legislative framework enabling a digital euro for citizens and for businesses’ on Nov. 7, the queen said a digital euro could encourage financial inclusion among underserved communities by circumventing roadblocks including transaction fees and documentation requirements. According to the regent, a central bank digital currency, or CBDC, in the European Union could help reduce the cost of remittances, but may require policy reforms and safeguards “to address difficulties and risks.”

“Public sector representatives have a duty to ensure that the financial system is open, inclusive, and responsive to the needs of all groups,” said the queen. “So let us envision that better future and build a digital euro that works for all Europeans.”

As queen consort of the Netherlands since 2013, Máxima has sometimes used her platform to advocate for financial technology as a means of inclusion, specifically citing CBDCs. The Netherlands has been operating under a constitutional monarchy since 1814, with the monarch — in this case, King Willem-Alexander — largely holding a symbolic role as president of the country’s Council of State. Queen Máxima also serves as the United Nations Secretary-General's Special Advocate for Inclusive Finance for Development.

Crypto has a new royal follower. Queen Maxima of the Netherlands has advocated for central bank digital currencies. That, and more stories making headlines in the world of cryptocurrencies pic.twitter.com/jQfkohmB86
— Reuters (@Reuters) October 19, 2022

The Netherlands was the host country for the Bitcoin Amsterdam conference in October, an event which drew in other members of royalty including Prince Philip of Serbia and policymakers including former European Parliament member Nigel Farage. U.S.-based crypto exchange Coinbase also announced its expansion to the Netherlands following regulatory approval from the country’s central bank in September.

ECB Raises Benchmark Rate by 75bps and Tones Down Long-Term Refinancing Operations

October 27, 2022 Bitcoin.com

Bitcoin is cooling its rally — Here are the BTC price levels to watch next

October 27, 2022 Coin Telegraph

Bitcoin

Bulls have a lot of work left to do, say Bitcoin analysts as consolidation enters for BTC price.

Bitcoin (BTC) consolidated gains on Oct. 27 as the highest levels in six weeks gave way to sideways action.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Bitcoin impresses with stability on GDP print

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $20,500 on Bitstamp after reaching local highs of $21,012 the day prior.

The largest cryptocurrency treaded water in line with United States equities at the Wall Street open, with the S&P 500 flat and the Nasdaq Composite Index down around 1% at the time of writing.

The U.S. dollar index (DXY) meanwhile began to claw back losses on the day, providing a headwind to risk assets absent for much of the week. DXY had seen its lowest levels since mid-September.

*U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView*

Ahead of a decision on interest rates by the Federal Reserve, GDP data showed a rebound for the U.S. economy in Q3.

“This [GDP] number is weaker in terms of the signal it sends about the forward strength of the economy than the last one was, even though the headline was positive,” Eric Winograd, director of developed market economic research at AllianceBernstein, nonetheless told the Financial Times.

In Europe, the European Central Bank (ECB) raised key rates by 0.75% as expected.

“Big day today, as the ECB comes in with their policy and GDP numbers from the U.S.,” Michaël van de Poppe, founder and CEO of trading firm Eight, summarized.

“Honestly, Bitcoin remains calm at these levels, would have expected a more significant correction since the last push.”

The latest data from CME Group’s FedWatch Tool put the odds of the Fed copying the 0.75% hike at 90.8% on the day.

*Fed target rate probabilities chart. Source: CME Group*

$14,000 return still haunts trader's chart

Analyzing the weekly BTC/USD chart, popular trader Rekt Capital highlighted the zone immediately below $22,000 as an important one to reclaim should bullishness continue.

“BTC is slowly approaching the red resistance area,” he wrote in an update on Oct. 26.

*BTC/USD annotated chart. Source: Rekt Capital/ Twitter*

Fellow analyst Il Capo of Crypto meanwhile said that $21,500 would need to form the basis for consolidation should bulls want to see $23,000 materalize.

His “main scenario” remained a reversal to new macro lows for BTC/USD, these potentially hitting $14,000.

*BTC/USD annotated chart. Source: Il Capo of Crypto/ Twitter*

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

FX Strategists From Citi Say Euro Could Sink to $0.86 if Macro Turmoil Continues

October 16, 2022 Bitcoin.com

ECB reports on digital euro validation, privacy one year into investigative phase

September 29, 2022 Coin Telegraph

CBDC

The ECB’s two-year investigative phase is halfway completed, with key use and policy issues clarified; more stakeholder engagement is planned before the decision is made to proceed.

The European Central Bank (ECB) Eurosystem digital euro project’s two-year investigative phase has reached its halfway point. The ECB published a progress report Sept. 29 that looked at design and policy issues that are under consideration or have been decided.

The report said commerce in physical stores and online is the biggest use case for a euro central bank digital currency (CBDC). Currently, most digital payment solutions are limited in reach and not of European origin. Thus, a digital euro could harmonize payment solutions and strengthen European strategic autonomy, in line with policy goals. The report said:

“A digital euro would preserve the role of public money as the anchor of the payments system in the digital age. It would ensure the smooth coexistence, convertibility and complementarity of the various forms that money takes.”

The ECB Governing Council has approved exploration of online payments validated by a third party as part of a first digital euro release, as well as an offline peer-to-peer validated solution with no timeline. Online peer-to-peer solutions will not be pursued further in this phase.

Anti-Money Laundering requirements and the desire to limit the CBDC’s use in investments prevent the full anonymity of a digital euro, but the report suggested a digital euro would have privacy provisions similar to current digital payment options, with potentially greater privacy for low value and low-risk transactions.

The digital euro will restrict large holdings and be designed to limit its use as an investment tool, due to financial stability considerations. The Governing Council has approved a waterfall mechanism that could transfer digital euro holdings above the limit to a commercial bank account. An offline holding limits may also be imposed. A “wide set of tools” will be incorporated into the design to respond to future financial conditions.

The European Commission will propose a regulation to establish the digital euro in the first quarter of 2023. The Governing Council will decide in October 2023 whether to move on to development and testing. That phase may last around three years.

In a statement in front of the EU Parliament, ECB board Panetta confirmed that the ECB’s Governing Council has now endorsed a first set of foundational design choices for the digital euro.

He mentions these two explicitly:
— Patrick Hansen (@paddi_hansen) September 29, 2022

The progress report looked exclusively at a retail CBDC. ECB executive board member Fabio Panetta recently discussed the possibility of creating a wholesale digital euro for use by banks and financial institutions. Panetta summed up progress on the digital euro in his quarterly presentation to the Committee on Economic and Monetary Affairs of the European Parliament also on Sept. 29.

Crypto startup to save iconic fiat money sculpture with 1M euros funding

September 29, 2022 Coin Telegraph

Banks

Crypto industry is coming to save the troubled Euro monument in Frankfurt after traditional banks refused to support the symbol of Eurozone decision-making.

The paths of traditional finance and the cryptocurrency industry have intersected again, with a crypto startup coming to save the iconic Euro monument in Frankfurt.

Frankfurt-based crypto startup Caiz Development will provide 1 million euros, or about $961,000, in funding over the next five years to rescue the famous Euro sculpture.

Announcing the news on Tuesday, Caiz said that the firm saw a good marketing opportunity in supporting the sculpture by obtaining unique exposure.

Through the funding, the firm was able to put its product board next to the 14-meter-high euro sign bearing 12 yellow stars, which represent the original members of the currency union.

*Euro monument and Caiz’s marketing program. Source: Caiz Development*

The iconic Euro statue was erected in 2001 in front of the former European Central Bank headquarters to celebrate the introduction of the euro and has since become a symbol of Eurone decision-making. The monument has come under trouble in recent years as it has been frequently vandalized, causing the Frankfurt Culture Committee to spend some 250,000 euros every year to keep the sign in a proper condition.

The committee sought sponsorship support from 110 banks in order to save the sculpture, but none of them wanted to support the famous Euro sign. Committee chairman Manfred Pohl said that 90 of the banks didn’t even bother answering, while those 8 who responded did not provide enough funds to save the sign.

“This symbol is a part of the identity of the city of Frankfurt. I cannot understand that in Frankfurt, we must beg for money,” Pohl said.

Now, the iconic monument is saved thanks to the cryptocurrency industry, which is often very skeptical about the existing fiat currency system. Caiz CEO Joerg Hansen admitted that the cryptocurrency industry often opposes government-backed centralized currencies to decentralized cryptocurrencies.

“Our first reaction when we heard the sign was in danger was we couldn’t believe the city or the banks weren’t really interested in it,” Hansen said. “With how often this sign gets photographed, we said ‘Look, this is an absolute no-brainer’,” he stated.

Fed Chair Powell Sees ‘Real Need’ for More Appropriate Defi Regulation Citing ‘Very Significant Structural Issues’

September 28, 2022 Bitcoin.com

ECB should have DLT wholesale settlements when the market wants it, official says

September 26, 2022 Coin Telegraph

CBDC

Executive board member Fabio Panetta says it would undermine financial stability if the ECB were unprepared to use distributed ledge technology, but that’s the best he can say for it.

The European Central Bank (ECB) needs a wholesale central bank digital currency (CBDC) because market players expect it, ECB executive board member Fabio Panetta told a banking symposium in Germany on Monday. Two options for wholesale CBDCs are currently under consideration.

Wholesale CBDC is not a new concept, Panetta said. Eurosystem’s Target2 uses a centralized CBDC, strictly speaking. Target2 is a real-time gross settlement system in use since 2017 that also provides a securities settlement platform and an instant payment settlement service. Despite this, banks and financial market institutions continue to explore distributed ledger technology (DLT), Panetta said.

The digitalisation of finance has broadened payment options, with emerging fintechs, big techs and cryptos causing disruptions, says Executive Board member Fabio Panetta at the @bundesbank. We need to preserve an anchor of stability for the monetary and payments systems.

1/4 pic.twitter.com/Fo9xQtHLZo
— European Central Bank (@ecb) September 26, 2022

If Target2 is difficult to use, market players will turn to commercial bank money and stablecoins, Panetta continued. That would undermine financial stability by fragmenting trading and liquidity and removing central bank money from the process. Besides, stablecoins “are stable in name only.”

While he saw the potential for DLT to improve pieces of the settlement system, Panetta considered CBDC’s advantages over existing technologies unproven. Cost optimization may be possible at times too, Panetta said, but he still had concerns:

“Importantly, the governance of major DLT technologies and networks is dominated by actors who are either unknown or based outside Europe, which raises concerns about strategic autonomy.”

Panetta acknowledged the need for an ECB CBDC with little enthusiasm:

“Despite the uncertainties surrounding DLT’s potential, we want to be prepared for a scenario where market players adopt DLT for wholesale payments and securities settlement.”

The ECB is considering two options for integrating DLT and Target services. The first is to create a bridge between DLT platforms and central bank infrastructures. That course of action would probably be faster to implement than the option of creating “DLT-based wholesale settlement service with DLT-based central bank money.”

Market conditions would be the deciding factor, Panetta said.

The ECB has weighed the virtues of CBDC v. Target2 before. Target2 is broadly comparable with the proposed FedNow system that has been under consideration in the United States since 2019.