European Union Moves Closer To CBDC; National Security, Digital Assets Combo Reaches Congress

EU ‘likes’ CBDC

The European Union appears to see an opening for a central bank digital currency (CBDC). Yesterday, the European Commission published two new proposals including a framework for the digital euro that could be implemented “over time” and moved the continent ever closer to its own CBDC.

Valdis Dombrovskis, EVP of the European Commission said in a release,Today’s proposals will also make sure that cash will continue to be fully available, while allowing the European Central bank to develop, over time, the practical aspects of the digital euro.”

In addition, along with Dombrovskis, Fabio Panetta, Member of the Executive Board of the European Central Bank (ECB) penned, “Why Europe needs a digital euro” yesterday. See the 2-pager (PDF).

Highlights include:

“Protecting privacy is a vital feature of the digital euro. The ECB would not see users’ personal details or their payment patterns. The offline functionality would also bring a higher degree of data privacy than any other digital payment methods currently available.”

A digital euro would also reduce payment-related fees for consumers by spurring competition in Europe. At present, two-thirds of Europe’s digital retail payments are processed by a handful of global companies. Thanks to greater competition, customers and merchants would benefit from cheaper services.”

CoinDesk’s Jack Schickler covers the news – including the skeptics – and notes, “The law doesn’t bring the digital euro into being as such – since it’s the ECB that needs to decide whether to issue the CBDC.” Read more.

more tips:

Remarks by Executive Vice-President Dombrovskis and Commissioner McGuinness on financial data access and payments –

national security crucible

A new bill introduced on June 7 by Senator Tommy Tuberville (R, AL) and co-sponsored by Senator Kirsten Gillibrand (D, NY), “Prohibiting Foreign Adversary Interference in Cryptocurrency Markets Act,” has finally published on the database.

S.1870,” as it is known, has been referred to the Senate Agriculture Committee and marks a growing vector for development of a digital assets regulatory framework – concerns around national security.

“It should be obvious by now: Communist China is our No. 1 geopolitical rival and security threat. Somebody needs to tell America’s financial regulators…” began Sen. Tuberville in his June 7 op-ed which criticized the Securities and Exchange Commission for its licensing of Prometheum. Gillibrand’s participation in the bill is notable, but nothing new for the Senator who has criticized the SEC and Chair Gary Gensler in the past (see February in Punchbowl News).

Since the implosion of FTX last November, bipartisan support appears to have wavered for crypto, publicly at least. But, nothing catalyzes bipartisan support on Capitol Hill more than national security. The Prometheum licensing and its vagaries would appear to put added pressure on Chair Gensler regarding his current regulation by enforcement approach and limited registration of digital asset-related entities.

DeFi microscope

In addition to artificial intelligence (AI) and cyber threats, digital assets have made the agenda for the July 18 Commodity Futures Trading Commission Technology Advisory Committee meeting. “Decentralized finance (DeFi) models such as decentralized autonomous organization (DAO) and the Commission’s recent Ooki DAO case will be discussed, in addition to other DeFi issues,” promises the Committee’s CFTC sponsor Commissioner Christy Goldsmith Romero in a press release. A new subcommittee on “Digital Assets and Blockchain Technology” will also be introduced. No word on its membership, yet.

FTX is back, kinda

FTX may be starting up its exchange again if current CEO John J. Ray has his way and blockchain technology company Figure is reported to be at least one of the companies bidding on the FTX technology assets in order to maximize value for creditors says The Wall Street Journal.

The WSJ explains, “In general, creditors in bankruptcies fare better when the underlying company reboots instead of being sold for parts. That is especially true for FTX: One of the largest pools of crypto assets that could be distributed to customers is FTT, FTX’s own in-house token, which customers used to help pay for transactions and trade with one another on the platform. Without a revival of the exchange, the FTT tokens likely don’t have a use-case and could end up being worthless.” Read it.

Meta meta

Meta Platforms policy director Kevin Chan speaks to Politico about the company’s latest metaverse developments and a new paper produced by Meta – with help from The Economist – which lays out what the company says are the “four ‘pillars’ of metaverse development: Availability, affordability, relevance, and readiness.”

See the report on The Economist’s website.

Politico sums up the report thusly: “Metaverse developers are facing significant challenges when it comes to access and affordability, but they have necessary tools in place to tackle them.” Read the Politico article.

studying Bitcoin, custody

Blockchain Association head of industry affairs Dan Spuller, who is also a member of the North Carolina Blockchain Initiative, announced on Twitter yesterday that a new “custody study” bill has passed in the North Carolina legislature (see the bill).

The bill “Directs/Funds to [the North Carolina Treasurer] to Study Benefits of Bitcoin and Custody,” tweeted Spuller.

still more tips

Illicit Crypto Ecosystem Report: A Comprehensive Guide to Illicit Finance Risks in Crypto (June) – TRM Labs

Opinion: Gary Gensler Failed the U.S. Crypto Industry, and So Has Congress – CoinDesk

Opinion: Gary Gensler is hurting the little guys for Wall Street – CoinTelegraph

“ARK has amended their 19b-4 for spot bitcoin ETF to include a surveillance sharing agreement bt CBOE and a crypto exchange (likely Coinbase), which makes their’s like BlackRock’s filing now, and puts them in pole position to be approved first bc they filed first.” – Eric Balchunas, Bloomberg on Twitter

MicroStrategy Buys More Bitcoin, Treasury Tops $4.5 Billion – Decrypt

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