Image credit; Peter Juelich/Bloomberg
Head of ECB Finds Stablecoins Dangerous
Christine Lagarde, chief of the European Central Bank has warned that private stablecoins pose serious risks in an article published Monday. However, public ones would be a boon in her eyes.
Lagarde posits that “if widely adopted, stablecoins could threaten financial stability and monetary sovereignty. For instance, if the issuer cannot guarantee a fixed value, or if they are perceived as being incapable of absorbing losses, a run could occur. Additionally, using stablecoins as a store of value could trigger a large shift of bank deposits to stablecoins, which may have an impact on banks’ operations and the transmission of monetary policy”.
Her comments follow on from her becoming more bullish to a ‘Digital Euro’. Indeed, in the article she also mentions the initiative, stating that “a properly designed digital euro would create synergies with the payments industry and enable the private sector to build new businesses based on digital euro-related services. A digital euro would also be an emblem of the ongoing process of European integration and ultimately help to unify Europe’s digital economies”. – READ MORE
CFTC Beats Records of Retail Fraud Actions
The Commodity Futures Trading Commission (CFTC) has disclosed in a press release on Tuesday that the body has launched the “most retail fraud actions (56) in a single fiscal year in CFTC history, including a record number of actions involving digital assets (7)”.
The CFTC noted that it had set a new record for the number of enforcements during 2020, totalling $1.3 billion. A number of these actions had been taken against actors seeking to take advantage of victims in relation to the Covid-19 pandemic. – READ MORE
Ukraine Looks at Crypto Bill
The parliament of Ukraine, the Verkhovna Rada, has held one hearing on a newly drafted cryptocurrency bill. It now has two more hearings before being able to be passed into law.
The bill sets out digital assets as “a set of data in electronic form,” which “can be an independent object of civil transactions, as well as certify property or non-property rights.” It suggests not considering virtual assets as legal tender in Ukraine.
On the issue of ownership, virtual assets will be deemed to belong to the party that holds the private keys, except for custodial situations and illegal proceeds or those forfeited through a judicial process. Virtual Asset providers also have to be registered and comply with Ukraine’s AML/CFT & data protection stipulations. – READ MORE
Saudis and UAE Sound Success over Joint CBDC
The Kingdom of Saudi Arabia and the United Arab Emirates has released a report on their joint offering of a Central Bank Digital Currency. Named ‘Project Aber’ – the Saudi Central Bank and Central Bank of the U.A.E. Joint Digital Currency and Distributed Ledger Project seems to have been a success.
The report is positive on the technology, stating that they are “pleased by the promising results, insights, and learnings described in this report and trust that they will benefit the central banking community and broader financial ecosystem in visualizing the potential of this new technology to transform the GCC [Gulf Coast Countries] financial markets”. 6 commercial banks in the two countries took part in Project Aber. – READ MORE
6AMLD Begins to be Implemented
From this week the European Union’s 6th Money Laundering Directive (6AMLD) will begin to be implemented by member states.
The directive is the first time that cybercrime has featured as a predicate offence, includes a requirement that businesses cooperate and expands the liability from individuals to legal persons (company senior management). Additionally, it will make aiding and abetting money laundering activities a crime (whether or not material benefit was received by the legal person aiding). – READ MORE
Russia’s Central Bank Not Having Ruble-Based Stablecoins
Russia’s central bankers have made it clear that they are not interested in the idea of private stablecoins pegged to the Ruble, and that they intend on following in China’s footsteps.
“China has completely banned any stablecoins pegged with the yuan. I do not think we’re far from that. The central bank will suppress everything that is positioned as a means of payment. We assume that the ruble is the means of payment of the Russian Federation” said Sergey Shvetsov, the First Deputy Governor at the central bank of the Russian Federation. – READ MORE