Euro

Bitcoin will bring global payments out of the ‘fax era’ — Ex-PayPal boss

September 11, 2023 Coin Telegraph

Marcus said there’s still no universal protocol when it comes to transferring money, unlike information which can be shared via email.

While information today can be easily transferred over the internet via email or text, global payments on the other hand, have remained in a “fax era," according to the former president of PayPal.

In a Sept. 11 interview with CNBC, the former PayPal executive and co-founder of Bitcoin Lightning-focused payment service Lightspark said he believes Bitcoin's Lightning network could solve the cumbersome process of sending money across jurisdictions.

“If you were to stop [someone] and wanting to communicate with them you could ask them for an email address and you can email them easily the next minute [and] you could text them,” said Marcus.

However, there’s no universal protocol when it comes to transferring money over the internet, he said:

“If you were to send them money [but] they were not a U.S citizen here using one of the same fintech apps you're using then you wouldn't be able to do that. So we're still in the fax era of global payments.”

Marcus explained that a money transfer to non-U.S. residents in this case would involve obtaining their bank account number and walking to the local bank to pay $50 for an international wire.

“If it's after Friday at 5 pm, tough luck,” Marcus added.

David Marcus on #bitcoin as base settlement layer for "Trillions of dollars of transactions"pic.twitter.com/L21fmiwxyZ
— Alex Stanczyk ∞/21m (@alexstanczyk) September 11, 2023

Marcus, who co-founded Lightspark in May 2022 and serves as CEO, said his company is now in a race to solve that using the Bitcoin Lightning network.

The former PayPal president however believes that ultimately, Bitcoin Lightning won't be used so much for everyday purchases, and instead be mainly used for overseas transfers.

“Our view is actually that Bitcoin is not the currency that people will use to buy things.” Instead Bitcoin will be used to send U.S. dollars to someone that ultimately receives it in the form of a Japanese Yen or Euro on the other side of the world, the Lightspark boss explained.

Marcus said Bitcoin’s settlement layer combined with Lightning’s real-time payments enables cash finality at a very low cost.

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Digital euro can ward off a host of private payment service ills: ECB official

September 4, 2023 Coin Telegraph

CBDC

Private payment services can gain a monopoly over services with no benefit to other market players or economic stability, ECB board member Fabio Panetta said.

The European Central Bank (ECB) is quite happy with the European Commission's (EC) legislative proposals for the digital euro. ECB executive board member Fabio Panetta told the European Parliament’s Committee on Economic and Monetary Affairs in a speech on Sept. 4 that the proposals “put Europe at the forefront of advanced economies” in CBDC development, potentially heading off private dominance of the financial sector and the ills that implies.

The EC made its proposals public on June 28. Panetta, a critic of cryptocurrency, called the EC proposals for the euro central bank digital currency (CBDC) “a new paradigm for preserving monetary sovereignty” that would ensure Europeans always have access to a public payment option, whether it was cash or digital, even as “closed-loop solutions are becoming increasingly prevalent” in private payment services. Panetta compared private payment systems to private messaging, where users are pressured to join the most popular systems.

A digital euro would be a new form of central bank money, says Executive Board member Fabio Panetta. It is now up to legislators to ensure it would replicate key characteristics of cash in the digital sphere, particularly its privacyhttps://t.co/nQJzYylwpV

1/3 pic.twitter.com/4XPlk83Lwj
— European Central Bank (@ecb) September 4, 2023

The EC proposed giving the digital euro the status of legal tender, making its acceptance for payment mandatory. Panetta also praised the EC’s privacy proposals for the digital euro. He specified:

“The Eurosystem would be unable to see the personal details of digital euro users or connect any payment information to private individuals. Intermediaries would only see the user information needed for onboarding and compliance with existing regulation.”

“Furthermore, the possibility to pay offline would provide cash-like privacy, with neither the intermediary nor the central bank processing the payment,” Panetta said.

The proposals also included reasonable pricing policies and allowing the ECB to maintain equilibrium in the financial systems with tools like holding limits. Panetta said:

“Let me emphasise, once again, that the issuance of a digital euro represents an opportunity, not a risk, for the European financial sector.”

The alternative to introducing a CBDC is not maintaining the status quo. Rather, it is losing ground to new private solutions that could impact the economy, Panetta said. He held PayPal’s recently introduced PYUSD stablecoin up as an example of potential risk.

Private payment service providers seek to gain market share and have no motivation to restrict their range of services or make them compatible with other services. As a result, a private service could attain a monopoly position on the market, as has happened before, Panetta explained.

In contrast, the digital euro “would pay due attention to orderly adjustments in the financial sector while offering payment service providers a platform for innovations with pan-euro area reach,” he said.

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Spanish central bank official talks about private payment services in era of digital euro

August 25, 2023 Coin Telegraph

Coin Telegraph

Banco de España Deputy Gov. Margarita Delgado voiced concern about financial stability issues but painted a rosy picture for nonbank financial service providers.

Deputy Governor of the Bank of Spain Margarita Delgado spoke to university students and others about the introduction of the digital euro in Pamplona on Aug. 25. Looking into a future through the lens of the European Commission’s recently proposed digital euro legislative plan, she spoke at length about how private payment solutions will interact with the digital euro and its infrastructure.

The digital euro can help the European Union overcome challenges such as cross-border payment barriers, the costs to businesses of using private payment service providers (PSPs) and the general lack of PSPs in Europe. The development of central bank digital currencies and stablecoins elsewhere could make the last problem worse without the introduction of the digital euro. She said:

“We believe there is enough space for a digital euro and private payment solutions to co-exist. […] In fact, our expectation is that the digital euro enables the development of new pan-European payment and financial services by the private sector, making it easier to compete with non-European solutions.”

The digital euro would not be covered by common deposit insurance until a common supervisory and resolution authority is put in place under the European deposit insurance scheme. Financial security has to be considered before the digital euro is launched, Delgado added.

Continuamos con la tradicional mesa redonda sobre política monetaria con Margarita Delgado, subgobernadora del Banco de España, @burkhardbalz, miembro del Comité Ejecutivo del BundesBank, Ángel Nigorra, director general de Bizum España, y @PabloZalba, comisario de los CEV. pic.twitter.com/Q05tFeaK17
— Equipo Europa (@Equipo_Europa) August 25, 2023

The European Central Bank (ECB) foresees getting the digital euro up and running in the eurozone before expanding its reach. The retail use of the digital euro outside the eurozone will provide new opportunities for private PSPs to serve as intermediaries, Delgado noted.

The ECB has its own wish list for the regulation of PSPs. Delgado said:

“It [the ECB Eurosystem] has also called on regulators to act in order to require payment service providers to make the digital euro available to the broad population.”

The ECB will request that PSPs offer a digital euro physical payment card as well.

PSPs will be banned from charging fees for basic services or requiring a contractual agreement before providing access to the digital euro under the proposed regulation. They will be required to provide onboarding support for members of vulnerable groups, “including the availability of human interaction to guide users through onboarding and transaction execution.”

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Binance limits withdrawals in Europe, cites payment processor issues

August 21, 2023 Coin Telegraph

Binance

In a deleted customer service message, Binance said that the failed withdrawals were caused by temporarily suspended EUR transactions through SEPA.

Binance cryptocurrency exchange customers are allegedly facing troubles with fiat withdrawals in Europe due to issues related to the Single Euro Payments Area (SEPA) transfers.

The exchange has allegedly suspended euro withdrawals and deposits via SEPA, Binance’s customer support wrote in a now-deleted message on X (formerly Twitter) on Aug. 20.

In the now-deleted message, the cryptocurrency exchange said it doesn’t have a specific time frame for restoring SEPA transfers, adding that its payment provider “can no longer support these transactions.”

“We understand the inconvenience this has caused, and we're actively working to resolve this as soon as possible,” Binance said in a tweet that has since been deleted.

The statement came in response to an alleged Binance user in Europe, who claimed to have bought a “large amount of EUR on Binance” a few days ago. The alleged client complained about being unable to withdraw the euros to their bank account or sell them on Binance due to the closure of their Paysafe account. The user added:

“According to customer support there is nothing I can do about it except waiting for Binance to find a new payment provider. Letting users buy EUR, just to block them from accessing it right afterwards is what you would expect from scam exchanges, not Binance.”

The news comes a few months after Binance informed users that its current euro banking partner, Paysafe Payment Solutions, would discontinue supporting the crypto exchange.

“Users will need to update the banking details used to deposit to their Binance accounts and may be required to accept new terms and conditions to continue using SEPA services after this date,” Binance said at the time.

In a written response to Cointelegraph, Binance said the customer support message on Twitter/X was "sent in error," adding that the "SEPA deposit and withdrawal service will continue until 25 September as originally communicated."

Binance's recent withdrawal-related issues in Europe are not rare for the exchange. In May, Binance halted Bitcoin (BTC) withdrawals, citing a large backlog of pending withdrawals. The halt came one day after Binance experienced its first withdrawal outage amid a clogged Bitcoin mempool, with more than 400,000 transactions getting stuck on the BTC blockchain.

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Germany is dragging Europe’s economy down — and that’s great for crypto

August 4, 2023 Coin Telegraph

Bitcoin Price

Cointelegraph analyst and writer Marcel Pechman explains how a weakening German economy — Europe’s largest — is a positive for cryptocurrencies.

In the latest episode of Macro Markets, Cointelegraph analyst Marcel Pechman discusses the recession in Germany, Europe’s largest economy. According to a recent headline in The Wall Street Journal, “Germany is dragging down Europe’s economy.“ The article explains how the country heavily depends on manufacturing, which has been hurt as foreign governments rush to protect domestic industries.

According to Pechman, Germany’s gross domestic product (GDP) ranks fourth globally, 42% bigger than France’s GDP. Moreover, manufacturing is responsible for nearly 20% of its economy. To make things worse, the manufacturing industry in Germany employs 10% of the workforce.

As the surplus (exports minus imports) reached its lowest level in 23 years, it is causing a GDP contraction for Germany, which affects the government’s capabilities to pay for its costs, including pensions and public workers. Pechman then shows how the German government threw gas on the fire with recurring interventions to save the manufacturing industry.

Pechman reminds us that the euro has a mere seven-year head start versus Bitcoin (BTC) and that an eventual weakening of Germany represents a considerable risk for the European Central Bank and the euro. Consequently, regardless of how the United States dollar is doing, the euro represents a more imminent risk and is potentially positive for cryptocurrency adoption.

Shifting the focus to the Asian market, Japan’s central bank has raised the interest rate buyback cap to 1%. According to Pechman, the bank is trying to convince the markets that it is not raising interest rates, but that’s precisely what happened. The Japanese economy has been stagnant for the past 20 years, and its debt ratio has been above 200% of the GDP since 2010.

According to a Bloomberg article, “Japanese investors are major holders of US government bonds and own everything from Brazilian debt to European power stations.“ According to Pechman, the rest of the world is concerned that Japan will have to offload its holdings in bonds, stocks and other assets, likely causing a crash in those markets.

The conclusion is that global economies are strongly interconnected, evident after the U.S. helped Europe during the banking crisis of 2023 by offering special liquidity agreements. Pechman says that at some point, the trust in this system will break, regardless of the trigger. That’s why positioning in Bitcoin makes sense, even though it is impossible to predict the timing of those events.

Check out the full episode of Macro Markets exclusively on the new Cointelegraph Markets & Research YouTube channel, and make sure to like and subscribe today!

Euro stablecoin market set to take off, thanks to real-world uses, regulatory clarity: Circle exec

July 17, 2023 Coin Telegraph

Circle

Circle’s Patrick Hansen provided an overview of the euro-denominated stablecoin market at EthCC; it all looks rosy, he said.

The future is bright for euro-denominated stablecoins, according to Patrick Hansen, European Union strategy and policy director at Circle. The United States dollar may preserve its “first mover” advantage, but euro stablecoin will see increasing real world use cases emerge to lift it above its current meager market share, Hansen said at EthCC in Paris.

Euro-denominated tokens currently represent 0.3% of the stablecoin market and are worth $300 million. At the same time, the euro occupies 20% of the traditional monetary system. It is in second place to the U.S. dollar in both instances and may stay in that position for a while. Hansen explained that the stablecoin market began with the dollar, and:

“Liquidity begets liquidity.”

With lower liquidity on the market, euro stablecoin users face higher risks and usage costs.

However, “we are currently moving from speculation to utility,” Hansen said of crypto capital markets as a whole. Increasing use of stablecoin in remittances, business-to-business transactions and other cases show this, and users will want to use stablecoin in their local currency for these purposes, Hansen said. Integration of euro stablecoins into existing European payment systems will also boost its use.

Decentralized finance will go the same way, with real-world uses, such as car loans, being delivered in local currency. This will lead to more regionalized liquidity pools, he explained.

What does a cup of coffee have to do with the future of the global economic system? As the US Congress prepares for its first vote on Stablecoin laws, US political leaders have a choice to make about the US and Dollar competitiveness. A video for political leaders below. $USDC pic.twitter.com/9sQyZwq4WE
— Jeremy Allaire (@jerallaire) July 13, 2023

Passage of Markets in Crypto-Assets (MiCA) regulations will provide regulatory clarity in the European Union. Hansen added:

“I would even go so far as to say regulatory incentives.”

The euro-denominated stablecoin market is now dominated by five tokens, including Circle’s Euro Coin (EUROC), which it introduced in June 2022. Circle has applied for a license in France to make EUROC a “full compliant e-money token,” Hansen said.

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JPMorgan Unveils Euro Blockchain Payments, Processes $300,000,000,000+ Worth of Transactions in Days: Report

June 23, 2023 The Daily Hodl

JPMorgan bank deploys JPM Coin for euro-denominated payments

June 23, 2023 Coin Telegraph

Banks

Germany’s conglomerate Siemens AG was reportedly the first company to process euro-denominated payments using JPM Coin.

The United States-based investment bank JPMorgan is expanding the implementation of one of its major blockchain projects, JPM Coin, into traditional banking.

JPMorgan has deployed its blockchain-based payment system, JPM Coin, to introduce euro-denominated payments for corporate clients, Bloomberg reported on June 23.

According to Basak Toprak, JPMorgan’s head of Coin Systems for Europe Middle East and Africa, JPM Coin went live with euro transactions on June 21. Germany’s conglomerate Siemens AG conducted the first euro payment on the platform, Toprak said.

The system enables wholesale payments such clients, including large multinational firms, to transfer euros to and from their JPMorgan accounts instantly and 24/7. That brings a significant improvement in comparison to traditional banking transactions, which are usually processed only during business hours.

“There are cost benefits to paying at the right time,” JPMorgan’s Toprak said. “This could mean they could earn more interest income on their deposits,” he added.

Launched in 2019, JPM Coin is a live blockchain application aiming to provide an alternative payment rail running on blockchain. Since launch, JPMorgan reportedly processed about $300 billion of transactions in JPM Coin. The bank is yet to scale the system as its overall daily payments volumes reportedly amount to roughly $10 trillion.

JPM Coin is part of JPMorgan’s blockchain-based platform known as Onyx Coin Systems. As previously reported, JPMorgan launched Onyx in 2020, aiming to improve the quality of wholesale payment transactions. The bank reportedly processed nearly $700 billion in short-term loan transactions via Onyx as of April 2023.

The news comes amid JPMorgan reportedly getting fined $4 million by the U.S. Securities and Exchange Commission over mismanagement of internal communications. In 2019, the bank reportedly mistakenly deleted about 47 million emails of its retail banking group dated from Jan. 1 to April 23, 2018. According to U.S. securities laws, financial firms are required to keep business records for three years.

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Issuing digital euro, or ‘Cash+,’ is probably a duty, French central banker says

June 22, 2023 Coin Telegraph

CBDC

François Villeroy de Galhau tried to soft sell the proposed euro CBDC to commercial bankers, emphasizing collaboration and the CBDC’s advantages.

The digital euro holds something in store for every stakeholder, Governor of the Banque de France François Villeroy de Galhau told commercial bankers on June 22. Disintermediation is not in the works, he said at the Global Official Institutions Conference hosted by French multinational bank BNP Paribas.

Before addressing the euro central bank digital currency (CBDC), Villeroy de Galhau began with an explanation of why the banking crisis earlier this year did not affect the eurozone. He credited European regulation and supervision for keeping its banking system safe. He noted, however, that the acquisition of Credit Suisse by UBS “raised new questions” about reliable crisis resolution. “The framework for the ECB to provide ‘Eurosystem resolution liquidity’ has yet to be built,” he said.

Villeroy de Galhau’s tone became more cajoling as he pivoted to the “less consensual ground” of the digital euro. He asked rhetorically, “As everything is becoming digital, why should central bank money be the only thing to remain in paper?”

️ François Villeroy de Galhau : "Notre engagement est de ramener l’#inflation à 2% d’ici fin 2025, qui est la bonne température de l’#économie, comme 37° est la bonne température du corps". pic.twitter.com/SEdiuedj8u
— Banque de France (@banquedefrance) June 15, 2023

“The e-euro will be a digital banknote, or ‘Cash+,’” he continued. Its use will be optional, but it will have the advantage of allowing the use of central bank money in e-commerce. Without it, a crisis of trust would arise “sooner or later.” But the digital euro will not lead to disintermediation, according to Villeroy de Galhau, as:

“We central banks have absolutely no intention to open private accounts.”

Wholesale CBDC is also a joint undertaking, Villeroy de Galhau said. Commercial and central banks share the goals of “fostering tokenised finance and tokenised securities; facilitating cross-border interoperability.” Not only would the digital euro not be a competitor to commercial bank money, it will help resist “giving ground to so called ‘stablecoins’ probably issued by non-European players.” In fact:

“It’s very probably our duty to issue a CBDC, but it’s our will to issue it with you, commercial banks, and not against you.”

The digital euro would be rolled out gradually beginning in 2027 or 2028, if approved by the European Central Bank Governing Council, Villeroy de Galhau said.

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Fear of a digital euro prompts Slovakia to add cash rule to constitution

June 19, 2023 Coin Telegraph

CBDC

Slovakia’s parliament passed a measure to amend its constitution to codify the right of its citizens to pay for goods and services with cash.

Slovakia will codify the right to use cash as a method of payment after a vote to amend the nation’s constitution passed in parliament on June 15.

The new legislation was sponsored by the Sme Rodina party, also known as the “We Are Family” party, and was reportedly drafted as a precautionary measure against the proposed digital euro.

Per a report from European news agency Euractiv, legislator Miloš Svrček, one of the legislation’s co-authors, told members of parliament during a debate that the amendment was necessary to protect Slovakia’s financial sovereignty:

“It is very important that there is a provision in the Constitution based on which we can defend ourselves in the future against any orders from the outside, saying there can only be digital euro and no other payment options.”

In tandem with legislation codifying the right to use cash, Euractiv also reports Slovakia will amend its constitution to shore up shopkeepers’ rights to refuse cash for payments of goods and services. This, reportedly, is meant to protect shopkeepers from robberies and exposure to germs and to provide an exclusion to existing cash-acceptance laws for shops offering card-only vending machines.

The European Union has been exploring the advent of a central bank digital currency (CBDC) or digital euro for some time. Analysts conducting research on behalf of parliament recently described the issue as a “solution looking for a problem” yet advised the EU to be prepared to pursue the option further in the future.

Among the largest points of contention in the potential development and implementation of a digital euro is the idea that such a currency would be entirely centralized and, thus, allow a single government entity to control transactions conducted with it. Some experts believe this presents an intrinsic threat to personal privacy.

There’s also the issue of competition. Though CBDCs could empower citizens who may have limited or no access to traditional digital banking tools without charging account premiums or intrinsic transaction fees, they present a potential threat to companies and private sector banks that profit from offering credit solutions for the underbanked.

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