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The Digital Euro Association sees automated micropayments as a way for Europe to maintain its digital competitiveness, once regulations are in place.

Europe could lead the world in developing the Internet of Things (IoT) by harnessing the potential of stablecoins, the Digital Euro Association argues in a new report. Machine-to-machine (M2M) payment is a field poised for growth, and stablecoins, in particular, offer advantages for it, the report says.

There are growing use cases for M2M micropayments in industrial and home or office settings, such as handling charges for shipping containers and other fees along a logistics chain and pay-per-use fees for 3D printing, cloud storage and many other services. Currently, these uses are hindered by their potentially overwhelming volume and structural weaknesses, such as the need to layer application programming interfaces (APIs).

Stablecoins could increase scalability and reduce or eliminate intermediaries, thereby alleviating the usability and security challenges that APIs present, according to the report. The use of stablecoins would also eliminate human error.

M2M payments also offer Europe a chance to take greater advantage of stablecoin technology, as many of its features are more applicable elsewhere:

“Outside of providing access to DeFi markets, typical stablecoin use cases have focused on improving financial inclusion or reducing the costs of cross-border remittances, which may not be so compelling in a European context.”

The European Central Bank has given M2M payments low priority for a digital euro design, even though “leveraging DLT technology in this context is being heavily explored.” Thus, stablecoin integration may be relevant in the long term:

“It is important that regulators foster growth in IoT and M2M payments, as it is key to maintaining the global competitiveness of the European digital economy.”

Regulators need to address a machine identity framework, stablecoin interoperability standards, guidance for unhosted wallets and other issues before the potential of stablecoins can be realized, the report says.

️ What are current stablecoin market developments? Short concepts on #digitalmoney. Stay tuned for the upcoming!https://t.co/O99CUoVVOk
— Digital Euro Association (@DigiEuro) March 6, 2023

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algorithmic Stablecoins

Despite the minting of $50 million in TUSD, Zhao previously said the regulatory crackdown on stablecoins in the U.S. will cause the USD-back stablecoin market to “shrink.”

Only days after reports of United States regulatory scrutiny of Paxos and Binance USD (BUSD), cryptocurrency exchange Binance has minted nearly $50 million worth of TrueUSD (TUSD).

The transaction took place on Feb. 16, according to data from Etherscan, and also comes two days after Binance CEO Chanpeng 'CZ' Zhao said in a Feb. 14 Twitter Spaces that Binance would look to “diversify” its stablecoin holdings away from BUSD.

We're live!

Tune-in to our Twitter Space AMA with @cz_binance below https://t.co/bXIztCKdry
— Binance (@binance) February 14, 2023

Despite minting nearly $50 million in TUSD from the TrustToken platform’s smart contract on Feb. 16, CZ had earlier said the recent regulatory action by the United States Securities Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS) over the long term may lead to a fall in the dominance of U.S. dollar-backed stablecoins.

“I think with the current stances taken by the regulators on the U.S. Dollar-based stablecoin, the industry will probably move away to a non-U.S. Dollar-based stablecoin, back to algorithmic stablecoins.”

“There’s multiple agencies putting applied pressure there. It is just going to shrink the U.S. Dollar-based stablecoin market,” he added.

CZ said that “this has prompted us to look for more options in different places” and that they’re now exploring other options.

50M #TUSD minted at #Binance and the price of $TRU increased by 200%.

On-chain data shows that #Alameda and #justinsun are the two largest minters of $TUSD.#Alameda minted a total of 1.64B $TUSD in history.#justinsun minted a total of 889M $TUSD in history. pic.twitter.com/N1tUjFQm5U
— Lookonchain (@lookonchain) February 16, 2023

While the CEO stated that Binance would provide more support for USD Coin (USDC) and Tether (USDT) over the short term — in expectation that BUSD “winds down over time” — he added that they’re now looking to explore more into Euro and Japanese Yen-based stablecoins.

As for BUSD, CZ said “the existing circulating supply of BUSD is there and safe, and as more people want to redeem, they will be burned.”

Interestingly, the Binance CEO added that he was never too bullish on the success of the Binance-branded BUSD stablecoin anyway:

“To be honest BUSD was never a big business for us, when we started I actually thought the BUSD project may fail, so we actually don’t have very good economics on that collaboration.”

Interesting, in September, TUSD was one of the stablecoins that Binance auto-converted to BUSD to enhance liquidity and capital-efficiency for its users. Other stablecoins that got auto-converted were USDC and USDP Stablecoin (USDP). This drove up BUSD’s share in the stablecoin market from 10% to 15% in a matter of weeks.

TrustToken launched TUSD on Mar. 5, 2018, which operates on the Ethereum, Avalanche, MATIC and Tron networks.

New TUSD is minted whenever a buyer wires USD to a third-party escrow that holds USD deposits on Prime Trust's behalf. Once received, TUSD will be transferred in a 1:1 ratio to the USD sent to the trader’s nominated ERC-20 or BEP-2 wallet address.

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ECB executive board member outlines plans for digital euro to European Parliament

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CBDC

ECB board member Fabio Panetta affirms the ECB’s digital euro privacy policy and says the digital currency will never be programmable, but it may have an app.

The digital euro, should it come into existence, will preserve the role of the central bank by extending payment options beyond those offered by cash, European Central Bank (ECB) executive board member Fabio Panetta told a European Parliament committee Jan. 23.

Panetta expressed satisfaction with the progress of research on a potential digital euro. He told the European Parliament Economic and Monetary Affairs Committee:

“The ECB is at the global forefront of the efforts by central banks to design state-of-the-art digital payment solutions for both retail and wholesale transactions.”

Access to the digital euro would initially be open to consumers, businesses and governments within the euro zone, then be extended to individuals and businesses in the European Economic Area and finally to “selected third-party countries,” on the basis of agreements, Panetta said.

Accessibility and usability would best be delivered through a scheme that provided uniform rules, standards and procedures to allow the development of additional products and services based on it, Panetta said. Transactions with the digital euro should be free, with extra services from intermediaries available for voluntary use.

Our priority for the digital euro project has always been clear: to preserve the role of public money in retail payments by making it available in digital form, alongside cash, says Executive Board member Fabio Panetta.

Read the full speech https://t.co/6UWtNKsqKX

1/4 pic.twitter.com/ANku5XwWsf
— European Central Bank (@ecb) January 23, 2023

“The digital euro would never be programmable money,” Panetta said. “The ECB would not set any limitations on where, when or to whom people can pay with a digital euro.” The ECB will not seek access to personal data either, he told the committee:

“When it comes to the central bank, we propose that we do not have access to personal data. And it will be for you, as co-legislators, to decide on the balance between privacy and other important public policy objectives like anti-money laundering, countering terrorism financing, preventing tax evasion or guaranteeing sanctions compliance.”

The ECB is considering creating a Eurosystem app to assure that users can access services throughput the euro zone. Panetta added:

“When it comes to the hardware, people could pay either with mobile phones, physical cards or possibly other devices like smartwatches.”

Research will transition from the investigative to the realization stage in the third quarter of this year, Panetta affirmed. He concluded by reminding the legislators of their role in the digital euro project. “It has a clear political dimension in view of its broad societal implications,” echoing sentiments recently voiced by the Eurogroup of financial ministers.

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Binance SWIFT banking partner set to ban USD transfers below $100K

January 22, 2023 Coin Telegraph

Binance SWIFT banking partner set to ban USD transfers below 0K

bank account

Binance stressed that credit and debit card payments will continue to be accepted and that non-USD bank transfers would still be processed through the SWIFT payment system.

Binance has informed its retail customer base of a potential incoming service disruption that may halt on and off-ramp bank payment transfers.

The service disruption will impact users of U.S Dollar-held bank accounts that are looking to buy or sell cryptocurrencies for less than $100,000 via the SWIFT payment system. The disruption will take effect on February 1.

Binance announced the news to its “Binancians” by email on January 21, stressing that they’re now “actively seeking” a new SWIFT (USD) partner to avoid service disruptions for future bank payment transfers.

The cryptocurrency exchange added that this was the banking partner’s decision and that Binance wouldn’t be the only trading platform impacted by the change:

“This is the case for all of their crypto exchange clients. Please be advised that until we are able to find an alternative solution, you may not be able to use your bank account to buy or sell crypto with USD via SWIFT with a value of less than $100,000 USD after February 1st, 2023.”

Binance did however stress that customers would still be able to use their credit or debit card to buy or sell cryptocurrencies, and that payments to or from third-party exchanges would still be processed.

*Binance's letter to Binance retail users on January 21. Source: Binance.*

The cryptocurrency exchange added that SWIFT-based transfers would remain in operation for non-USD bank transfers, such as the Euro.

Binance confirmed the change wouldn’t impact its “Corporate Accounts.”

The banking partner involved is Signature Bank, according to a Jan. 21 report by Bloomberg. The bank set the minimum transaction limit of $100,000 in effort to decrease its exposure to the digital asset market, Bloomberg explained.

While payment service disruption wasn’t Binance’s decision, the trading platform has suspended transfers in recent times.

Binance recently imposed a temporarily suspension on Solana-based USDT and USDC deposits on November 17.

While the exchange also temporarily suspended Ether (ETH) and wrapped-Ether (wETH) deposits and withdrawals for about 10 days ahead of the Ethereum Merge.

Update 12:50am UTC time on January 22: Added a statement from Bloomberg.

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Spain’s central bank approves euro-linked token pilot as part of sandbox initiative: Report

January 18, 2023 Coin Telegraph

Business

To use the tokens, users will need to verify their identity through phone and video identification, and load their wallet with real euros.

The financial sandbox ar of the Bank of Spain, or Banco de España, has reportedly approved a project from fintech firm Monei testing a token linked to the euro.

According to a Jan. 18 report from Spain-based news outlet Cinco Días, the Bank of Spain gave the green light to Monei to issue its EURM token as part of a testing phase expected to last between 6-12 months. The sandbox was aimed at establishing a controlled testing environment for financial innovations projects in Spain under the supervision of central bank authorities.

As part of EURM’s testing phase, eligible Spanish residents with a phone number will reportedly be able to send the equivalent of 10 euro using the digital asset. The digital tokens will reportedly be backed 1:1 with physical euro held at Banco Bilbao Vizcaya Argentaria and Caixabank.

"The future of payments is digital,” said Monei CEO and founder Álex Saiz Verdaguer. “This is our opportunity to show the rest of Europe and the world that we are at the forefront.”

The Bank of Spain announced the launch of its own “exclusive” wholesale central bank digital currency, or CBDC, program in December 2022. Though Monei’s project is not a CBDC issued by the European Central Bank, or ECB, Verdaguer said testing it through Spain’s central bank could lay the groundwork for such a token:

“[The Bank of Spain] may sit down with the ECB and say that we have the product, that it is regulated and supervised and that it is shaped from there.”

The ECB announced in July 2021 that it had launched a two-year investigation phase for a digital euro, suggesting at the time a potential release in 2026. The central bank has since issued statements and working papers focused on the design and features of a CBDC, with the ECB Governing Council expected to review the results of the investigative phase in the third quarter of 2023.

Euro

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