France’s third-largest bank, Société Générale, launches euro pegged stablecoin

December 6, 2023 Coin Telegraph

The euro-pegged stablecoin will be the first of its kind in the region and will be available to the bank’s wide customer base for trading use.

Société Générale, France’s third-largest bank, has debuted its native euro-pegged stablecoin, making it one of the first European banking giants to foray into the stablecoin market.

The euro-pegged stablecoin, EUR CoinVertible, will debut on the Luxembourg-based Bitstamp crypto exchange, the Financial Times reported.

Jean-Marc Stenger, the CEO of Société Générale Forge, noted that the new stablecoin highlights the bank’s role in the evolving crypto domain while stressing the necessity for a stablecoin denominated in euros.

The private crypto stablecoin market is dominated by United States dollar-pegged stablecoins, with Tether and Circle being the only two key significant players.

The CEO highlighted that the new stablecoin has been developed with a focus on its usage in settling trades involving digital bonds, funds, and various assets.

Axa Investment Managers used the native Eur CoinVertible stablecoin to invest in the bank’s digital green bond. The bond has a value of 10 million euros (around $11 million) and a maturity of three years.

Amnesty International head says AI innovation vs. regulation is ‘false dichotomy’

November 28, 2023 Coin Telegraph

Coin Telegraph

Amnesty’s secretary-general said the EU has a chance to lead with new AI regulations and member states shouldn’t “undermine” the forthcoming AI Act.

The secretary-general of Amnesty International, Anges Callamard, released a statement on Nov. 27 in response to three European Union member states pushing back on regulating artificial intelligence (AI) models.

France, Germany and Italy reached an agreement that included not adopting such stringent regulations for foundation models of AI, which is a core component of the EU’s forthcoming EU AI Act.

This came after the EU received multiple petitions from tech industry players asking the regulators not to over-regulate the nascent industry.

However, Callamard said the region has an opportunity to show “international leadership” with robust regulation of AI, and member states “must not undermine the AI Act by bowing to the tech industry’s claims that adoption of the AI Act will lead to heavy-handed regulation that would curb innovation.”

“Let us not forget that ‘innovation versus regulation’ is a false dichotomy that has for years been peddled by tech companies to evade meaningful accountability and binding regulation.”

She said this rhetoric from the tech industry highlights the “concentration of power” from a small group of tech companies who want to be in charge of the “AI rulebook.”

Amnesty International has been a member of a coalition of civil society organizations led by the European Digital Rights Network advocating for EU AI laws with human rights protections at the forefront.

Callamard said human rights abuse by AI is “well documented” and “states are using unregulated AI systems to assess welfare claims, monitor public spaces, or determine someone’s likelihood of committing a crime.”

“It is imperative that France, Germany and Italy stop delaying the negotiations process and that EU lawmakers focus on making sure crucial human rights protections are coded in law before the end of the current EU mandate in 2024.”

Recently, France, Germany and Italy were also part of a new set of guidelines developed by 15 countries and major tech companies, including OpenAI and Anthropic, which suggest cybersecurity practices for AI developers when designing, developing, launching and monitoring AI models.

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European regulator: CASPs should work on protocol interoperability, self-hosted wallets

November 24, 2023 Coin Telegraph

Banks

The proposed new industry guidelines are intended to address issues around AML and CFT rules.

The European Union’s banking regulator, the European Banking Authority (EBA), wants to update existing Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) rules for crypto providers.

In a consultation paper published on Nov. 24, the EBA explains that current European regulations are no longer sufficient to govern AML/CFT standards compliance among crypto providers. The proposed new industry guidelines are intended to address these issues, and the EBA has given interested parties until Feb. 26, 2024, to comment.

In particular, the EBA suggests merging the AML/CFT criteria for payment service providers and crypto asset service providers (CASPs). It also proposes obliging CASPs to “enable the transmission of information in a seamless and interoperable manner” by enhancing the interoperability of their protocols.

Under the proposed new rules, CASPs will also be required to obtain and hold information on self-hosted addresses, ensure that the transfer of crypto assets can be individually identified, and verify whether that address is owned or controlled by the CASP customer. These requirements would be enforced when the transfer amount of the self-hosted account is above the 1,000 euro mark, although the EBA doesn’t specify whether this is a monthly, daily or a single-time threshold.

After the consultation process, the new guidelines should come into force on Dec. 30, 2024.

In October, the EBA released a consultation paper assessing the suitability of management body members and shareholders or members holding qualifying stakes in issuers of asset-referenced tokens and CASPs.

In July, the EBA encouraged stablecoin issuers to voluntarily adhere to specific “guiding principles” related to risk management and consumer protection.

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EU tech coalition warns of over-regulating AI before EU AI Act finalization

November 24, 2023 Coin Telegraph

Coin Telegraph

A group of 33 businesses and tech companies have signed a joint letter to EU regulators urging them not to over-regulate emerging AI technologies at the cost of innovation.

A group of businesses and tech companies have issued a joint letter to European Union regulators warning against over-policing powerful artificial intelligence (AI) systems at the expense of innovation.

The letter, which was sent on Nov. 23 and undersigned by 33 companies working in the EU, stresses that too-stringent regulations for foundation models like OpenAI’s ChatGPT and general-purpose AI (GPAI) could drive necessary innovation from the region.

It highlighted data that shows only 8% of companies in Europe use AI, which doesn’t come close to the European Commission’s 2030 goal of 75%. Additionally, only 3% of the world’s AI unicorns come from the EU.

“Europe’s competitiveness and financial stability highly depend on the ability of European companies and citizens to deploy AI in key areas like green tech, health, manufacturing or energy.”

The companies stressed that for Europe to develop into a “global digital powerhouse,” it needs companies leading in AI via foundation models and GPAI — two AI technologies under scrutiny in the forthcoming EU legislation.

“Let’s not regulate them out of existence before they get a chance to scale, or force them to leave.”

In addition to stressing the importance of not over-regulating the technologies, the companies also suggested solutions for EU leaders.

Suggestions include reducing compliance costs for companies, focusing on regulating high-risk use cases and not specific technologies, and clarifying where there are already overlaps in existing legislation.

This development comes as the EU is working on finalizing its landmark EU AI Act, which was initially passed back in June and is currently undergoing review and revision by member states.

Shortly after the initial act was passed, another letter was signed by 160 executives in the tech industry warning EU officials about the implications of too-strict AI regulations.

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FTX collapse, Binance’s US settlement provide strong case for MiCA regulations

November 23, 2023 Coin Telegraph

Coin Telegraph

European Commission policy officer Ivan Keller highlights high-profile centralized exchange shortcomings as key reasons for the implementation of MiCA regulations in Europe.

The collapse of FTX in 2022 and Binance’s recent $4.3-billion settlement with United States authorities provide a strong argument for the provisions of the European Union’s Markets in Crypto-Assets (MiCA) legislation, a European Commission official said in an interview.

Ivan Keller, policy officer for the European Commission, spoke to Cointelegraph at the MoneyLIVE conference in Amsterdam. News of Binance’s high-profile settlement with the U.S. Department of Justice (DOJ) broke the night before Keller’s keynote and served as a pertinent reflection point for MiCA’s full-scale application in 2024.

“I think we’ve had several unfortunate confirmations that kind of go down that path of robust regulation. FTX was definitely one of the big ones, and now recently with Binance,” Keller explained.

“Our position is that this rule book would mitigate some of the risks and, importantly, give regulators more clear-cut levers and powers supervising these entities so they can also mitigate those risks.”

The policy officer also gave an updated view of the path toward MiCA’s full application across the European Union. Hailed as one of the first comprehensive cryptocurrency legal frameworks globally, the regulations set out by MiCA will apply to all EU member states.

Keller stressed that MiCA’s objective is to promote innovation while addressing the risks to consumers, market integrity, financial stability and monetary sovereignty. The scope of the regulations applies to issuers of crypto assets and crypto asset service providers and aims to tackle market abuse.

MiCA entered into force in June 2023, but the application of rules governing “asset-referenced tokens” and “e-money tokens,” which largely fall under the umbrella of stablecoins, is expected to take effect in June 2024.

After that, rules for “crypto-asset service providers,” which include trading platforms, wallet providers, and cryptocurrency exchanges and services, will take effect in December 2024.

*A timeline of MiCA’s implementation through 2024. Source: Ivan Keller*

Keller added that the European Securities and Markets Authority and European Banking Authority are drafting several technical standards covering a broad scope of considerations.

“There’s around 40 technical standards that are being drafted now. They already consulted the public on a good part of them, and that’s still ongoing. They will then finalize that and then send it to the commission as a draft,” Keller explained.

The commission will then receive finalized standards as a draft, which will need to be adopted into internal procedures. Co-legislators, parliament and the European Council will have a scrutiny period of two months.

“Hopefully, that will be finished before MiCA ‘level one,’ which is this phase for stablecoins, kicks into effect in June 2024.”

Keller also said that cryptocurrency service providers have been given ample time to digest the expectations laid out through the MiCA consultation process.

“It’s been a good 18 months since the text was negotiated. The proposal has been out for a lot of time, and a lot of these things are also kind of borrowed from the traditional rule book,” Keller said.

He added that a “grandfathering clause” in MiCA allows CASPs to continue operating under the applicable national rules of EU member states over a supplemental period. However, these operators would not be able to “passport” services across the European Union.

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Italian regulators investigate online AI data scraping

November 23, 2023 Coin Telegraph

Coin Telegraph

The Italian Data Protection Authority has launched a “fact-finding” probe into the security practices of public and private websites to prevent AI data scraping.

The Italian Data Protection Authority, a local privacy regulator, announced the launch of a “fact-finding” investigation on Nov. 22, in which it will look into the practice of data gathering to train artificial intelligence (AI) algorithms.

The investigation aims to verify the adoption of appropriate security measures on public and private websites to prevent “web scraping” of personal data used for AI training via third parties from “the ‘spiders’ of the manufacturers of artificial intelligence algorithms.”

According to the regulator, this “fact-finding survey” applies to all public and private subjects operating as data controllers, established in Italy or offering services in Italy that provide freely accessible personal data online.

Although it did not name specific companies, it said that it is “in fact” known that “various AI platforms” scrape the web for the purpose of collecting large quantities of personal data. It said after the investigation it will take any necessary measures “even urgently.”

In July, Google was hit with a class-action lawsuit in the United States over its new AI data-scraping privacy policy across its web services for its own AI algorithmic training purposes.

Italian regulators invited AI industry experts, academics and others to participate in the process and share views or comments within 60 days.

The Italian privacy watchdog was one of the first to quickly scrutinize AI after it banned the popular AI chatbot ChatGPT from operating in Italy due to privacy breaches in March 2023. In May, Italy set aside millions of euros in a designated fund for workers at risk of AI replacement.

Earlier this week, Italy, France and Germany entered into an agreement on future AI regulation, according to a joint paper seen by Reuters. The agreement is expected to help further similar negotiations on a European Union level.

The three countries backed the idea of creating voluntary commitments for large and small AI providers in the European Union.

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Belgium seeks to reboot EU blockchain infrastructure project

November 22, 2023 Coin Telegraph

belgium

The country’s government plans to accelerate the development of a European blockchain infrastructure during its presidency of the Council of the European Union.

Belgium plans to accelerate the development of a European blockchain infrastructure during its presidency of the Council of the European Union in early 2024, according to the country’s government. The proposal aims to facilitate the secure storage of official documents like driving licenses and property titles.

The development of a public blockchain for pan-EU infrastructure is among the four priorities of Belgium’s upcoming presidency, the country’s Secretary of State for Digitization, Mathieu Michel, told Science|Business on Nov. 21. The remaining three initiatives will take on the matters of artificial intelligence (AI), online anonymity and the skills necessary for the digital economy.

Michel suggests rebooting the European Blockchain Services Infrastructure (EBSI) project, which was established by the European Commission in 2018 in collaboration with the European Blockchain Partnership, comprising the 27 EU member states plus Norway and Liechtenstein:

“That is a technical project. If we want to build a common infrastructure, it has to become a European project and a political project.”

The renewed EBSI would be renamed Europeum and used for public administration tasks, such as verifying driver’s licenses and other documents across the EU. According to Michel, the project could also support the digital euro infrastructure.

The official said it is important to use a public blockchain developed by EU member-states, not the private alternatives:

“In terms of security, transparency, and privacy, the blockchain can give control back to the citizen of the data that belongs to them.”

At the moment, Italy, Croatia, Poland, Portugal, Slovenia, Luxembourg and Romania have already signed up for the Europeum plan. The head office of the project will be in Belgium.

The process of regulatory consolidation around crypto and blockchain is moving steadily. In early November, 47 national governments issued a joint pledge to “swiftly transpose” the Crypto-Asset Reporting Framework (CARF) — a new international standard on automatic exchange of information between tax authorities — into their domestic law systems.

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German parliament member ’staunch opponent’ of digital euro, all in on Bitcoin

November 16, 2023 Coin Telegraph

Bitcoin Community

European Union lawmakers anticipate the arrival of the digital euro, but German politician Joana Cotar is pushing back against the currency and fighting in favor of Bitcoin.

The European Union has been actively preparing for what it envisions as the future of money. In the past year, it finalized its landmark comprehensive crypto legislation, the Markets in Crypto-Assets Regulation (MiCA), which is due to take effect in 2024 after closing its second consultation in October.

It has also made progress in its plan to introduce a central bank digital currency (CBDC), which is coming to fruition as the “digital euro.” De Nederlandsche Bank, the central bank of the Netherlands, has described it simply as an “electronic form of public money - the coins and notes in our wallets.”

Many local regulators are embracing the digital euro and touting its potential benefits, though not everyone is on board. In a recent survey out of Spain, 65% of Spaniards said they were not interested in using the digital euro.

Slovakia’s parliament even passed a measure in June that amended its constitution to codify a citizen’s right to pay for goods and services with cash in the face of the impending digital currency.

In Germany, one local politician is not only against the digital euro but is offering another digital solution for a financial revolution: Bitcoin (BTC).

Cointelegraph spoke with Joana Cotar, a member of the Bundestag — the German federal parliament — and a Bitcoin activist, about her take on the digital euro and why she believes in the benefits of Bitcoin.

Cotar has been outspoken on her stance on the EU’s digital monetary solution, which she told Cointelegraph is that of “a staunch opponent of the digital euro.”

"Nobody needs the digital euro,” says Member of Germany’s Parliament while wearing a #Bitcoin T-shirt. pic.twitter.com/Rw4qdeKE0h
— Bitcoin Archive (@BTC_Archive) November 11, 2023

She said a digital euro could allow central banks to set an “upper limit” for payments and ownership, making citizens “helplessly at [their] mercy.”

The digital Euro would also mean that each and every one of us could be totally monitored. As a convinced libertarian, I emphatically reject this. Anyone who is against surveillance and for freedom does not need a digital Euro!

According to Cotar, the Chinese social credit system should serve as a warning of the possibilities of the absence of cash and state-controlled payment systems. “I don’t want the authorities to be able to spy on our private life and misuse this data,” she said.

However, in April the program director for the digital euro at the European Central Bank, Evelien Witlox, said that the “ECB has no interest in users’ personal data.” In October, the EU’s data protection regulators issued a joint statement regarding anonymity in digital euro transactions.

Cotar is using her platform, among other things, to raise awareness among lawmakers of the potential dangers she believes to be associated with the digital euro.

While Cotar may not be on board for a digital euro, she is a champion of Bitcoin. She is behind the “Bitcoin in the Bundestag" initiative, which she told Cointelegraph is committed to raising awareness and educating members of the German Bundestag (MPs) about the potential and risks of Bitcoin.

“Establishing a formal Bundestag committee that recognizes the technological differences between Bitcoin and other crypto assets and mainly deals with the importance of Bitcoin for our society is very important for us.”

She said her initiative serves as an information resource for members of the Bundestag and helps them make more informed decisions about Bitcoin specifically.

When she explained her greater vision for bringing Bitcoin into regulators’ consideration, one major change she’d like to see is the allowance to pay taxes and fees paid in Bitcoin and using Bitcoin mining farms to stabilize the power grid.

“We need to promote the freedom aspects of Bitcoin (permissionless access, individual sovereignty) - this includes protecting privacy, ensuring security standards and preventing excessive regulation to maximize the benefits of Bitcoin.

Cotar would also like to initiate a “preliminary examination” for a legal framework that would recognize Bitcoin as a legal tender in Germany. “This includes ensuring the legal security for companies and citizens,” she said.

Wenn einem eine 72 Jahre alte Dame schreibt, dass sie #Bitcoin für ihre Enkel spart. Wie großartig kann man bitte sein? Mit über 70 mehr Durchblick als so manch Jungspund.
— Joana Cotar (@JoanaCotar) November 13, 2023

“We need to combat potential risks such as money laundering, tax evasion and other illegal activities associated with Bitcoin,” she said. "But without stifling innovation and the freedom aspects of Bitcoin.”

The Bitcoin-savvy lawmaker said her ideas for Germany could “easily be transferred” as a framework for other countries. She urges international cooperation to develop a blanket standard for Bitcoin and its cross-border use.

When asked if she feels similarly impassioned for other cryptocurrencies currently available on the market, her response was simply:

“My initiative is Bitcoin only.”

On Oct. 18 he European Central Bank (ECB) has announced it will begin the ”preparation phase” for the digital euro project following a two-year investigation into the potential EU-wide digital currency.

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EU backs Data Act with clause to shut off smart contracts

November 10, 2023 Coin Telegraph

Coin Telegraph

The Act, inclusive of a clause necessitating “kill switches” on smart contracts, only now needs approval from the European Council to pass into law.

The European Parliament has voted to approve the Data Act — controversial legislation that includes a stipulation necessitating smart contracts have the ability to be terminated.

In a Nov. 9 press release, the parliament said the legislation passed 481 votes to 31 against. To become law, it will now need approval from the European Council — the heads of each of the 27 European Union member states.

The adopted Data Act outlines the requirement that smart contacts “can be interrupted and terminated” along with controls allowing functions that reset or stop the contract.

*Highlighted excerpt of the Data Act relating to smart contracts. Source: European Parliament*

At its core, the Data Act would allow users to access data they generate from smart devices, with the European Commission claiming that 80% of such data collected is never used.

The Act’s critics have highlighted concerns about the smart contract clause, saying the definition is too broad and doesn’t provide clear details on when interruptions or terminations should occur.

A June open letter sent by EU blockchain advocacy bodies and signed by dozens of crypto firms also said the Data Act could see smart contracts that use data from public blockchains like Ethereum be deemed in breach of the law.

The European Commission has reportedly said, however, that the Data Act isn’t concerned with blockchain and fears the Act would make smart contracts illegal are unfounded.

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EU banking watchdog proposes liquidity rules for stablecoin issuers

November 8, 2023 Coin Telegraph

Coin Telegraph

The proposed guidelines are currently in the public consultation phase for the next three months and, if approved, will come into effect starting in June 2024.

The European Banking Authority (EBA) — the European Union’s banking watchdog — has proposed a new set of guidelines for stablecoin issuers that will set minimum capital and liquidity requirements.

The new liquidity guidelines aim to ensure the stablecoin can be quickly redeemed even during turbulent market conditions to avoid the risk of bank runs and contagion in a crisis.

Under the proposed liquidity guidelines, stablecoin issuers must offer any stablecoin backed by a currency that is fully redeemable at par to investors. The official proposal by the EBA noted that the stablecoin liquidity guidelines will act as a liquidity stress test for stablecoin issuers.

The EBA believes the stress test will highlight any shortcomings and lack of liquidity for the stablecoin, which can help the authority to only approve fully-backed stablecoins with enough of a liquidity buffer. The guidelines state:

“The liquidity stress testing will help issuers of tokens to better manage their reserve of assets and generally their liquidity risk. Based on the outcome of the liquidity stress testing, the EBA or, where applicable, the relevant competent authority/supervisor, may decide to strengthen the liquidity requirements of the issuer.”

Once approved, the proposal is set to come into effect from June to early next year. After implementing the guidelines, the authorities will have the power to strengthen the liquidity requirements of the relevant issuer to cover those risks based on the outcome of the liquidity stress testing.

The proposed liquidity rules are aimed at issuers of stablecoins, which can be non-bank institutions, meet the same safeguards, and avoid unfair capital or liquidity advantages over banks. Currently, the proposal is in the consultation phase, where the common public can give their input. The public consultation phase is open for three months until a public hearing is scheduled on Jan. 30, 2024.

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