Regulatory ECHO: Setting the course – Stablecoins or CBDC?


Take over or do it yourself – the choice that regulators and monetary authorities around the world are facing these days with a view to stablecoins and digital central bank currencies are spoiled for choice. The ECB has already made a decision and gave the go-ahead for the digital euro last week. The US Federal Reserve, on the other hand, is still undecided.

Major project CBDC – ECB initiates investigation phase for digital euro

It has been nine months since the European Central Bank published its first report on the digital euro. Since then, people in Frankfurt have stayed in half-eighth position and have always referred to ongoing investigations and experiments. But now it has been decided: Last week the ECB gave the green light to an initial pilot phase of the digital euro. With this, the monetary authorities in the Euro Tower now want to “shift up a gear”, announced ECB President Christine Lagarde in a press release.

She receives support for this from Deutsche Bundesbank. Its president Jens Weidmann praised the Frankfurt decision. They now want to work together to ensure “that a digital euro offers real added value for people in the euro area”.

However, blockchain technology is not to be used in the project. The ECB says that the energy consumption of the digital euro is “negligible compared to crypto assets such as Bitcoin”.

Federal Reserve tie: is it worth the effort of a CBDC?

In the US, meanwhile, people are still undecided how to deal with the global hype about digital central bank currencies on the one hand and future stablecoin projects on the other. Do it yourself or not – the US Federal Reserve remains without a decision on this issue. This goes out of the Utterances of Fed Chairman Jerome Powell in the US Senate and House of Representatives from last week. In it, the chief monetary authority stated that it was still unclear to him whether the benefits of CBDCs would outweigh their costs. A digital currency of its own could limit the flow of private coins, but “the more direct route” to digital payments is to regulate stablecoins. A corresponding report The Federal Reserve plans to present in September about the opportunities and risks of digital central bank currencies.

US government wants to use task force against ransomware – and pays insider information via cryptocurrency

Meanwhile, the White House continues to worry about crime in the crypto space. With a task force, the US government now wants to take action against ransomware attacks and sound out ways and means to put an end to blackmail payments via cryptocurrency. This was reported by the US police newspaper Politico last week.

At the same time, the Biden administration wants to take advantage of the fact that Bitcoin & Co. continue to enjoy great popularity with hackers and the cyber scene. The US State Department’s Rewards for Justice (RFJ) program now has cryptocurrencies as its official payout options for inside information added. Whistleblowers can now receive up to ten million US dollars per Bitcoin for investigation tips and advice against cyber criminals.


British financial regulator FCA pumps eleven million pounds into anti-crypto campaign

Meanwhile, skepticism towards the crypto sector continues to spread in Great Britain. The youngest of the bears witness to this britisfinancial regulator FCA announced campaign with which the agency wants to show young adults the risks of crypto investments. They want to take eleven million pounds (around 13 million euros) into their hands for this and use educational work to ensure that the British do not allow themselves to be seduced by “anonymous and irresponsible influencers”. In the previous weeks, the country’s advertising oversight had also announced that it wanted to take a particularly close look at the crypto space.

France wants to settle crypto supervision with the European financial authority ESMA

If France has its way, the European supervision of the crypto markets should soon find a common roof. To this end, the French market regulator AMF wants to relocate control to its European counterpart, ESMA, also based in Paris. Corresponding plans are reported by the Financial Times last week. The aim of the initiative should be to bundle expertise and avoid “regulatory arbitrariness”, according to the AMF in an associated one Press release. At the moment, the supervision of the markets is in the hands of the respective nation states.

China continues campaign against Bitcoin mining

Meanwhile, things are getting tighter for Chinese miners. Various provincial governments in the Middle Kingdom have been cracking down on digital miners for months. Now the next province is Anhui. In order to reduce electricity consumption over the coming years, the government now wants to stop all mining activities in the region. According to media reports, mining farms in the provinces of Henan and Gansu are also to be closed.

Paraguay disappoints Bitcoin enthusiasts – Brazil gets Ether ETF

If Bitcoin enthusiasts have their way, El Salvador should have been the first domino in a long chain of government crypto adoption. But nothing will come of this for the time being. After rumors recently circulated that Paraguay could follow in the footsteps of the Latin American dwarf state, the country’s parliament disappointed blockchain enthusiasts last week. For now, Bitcoin will not become legal tender in Paraguay. Rather, a recently passed law provides for stricter regulations for the domestic crypto industry.

Meanwhile, the Brazilian financial markets continue to open up to the crypto industry. Investors have been able to put their money into a Bitcoin ETF here for months. An index fund for the second largest cryptocurrency, ether, will follow. The Brazilian market regulator gave the go-ahead for this in the past few days.