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European Central Bank Policymaker Says Stablecoins Not Cause for Alarm

ECB’s governing council Jens Weidmann has said that while stablecoins offer opportunities for prosperity, users should be vigilant.

A European Central Bank (ECB) official has stated that users should be aware of the risks associated with the stablecoins use, but not to be alarmed.

As Reuters reported on July 18, member of the ECB’s governing council and president of the Deutsche Bundesbank, Jens Weidmann said that stablecoins — digital currency designed to minimize price volatility by being pegged to another asset — offer users opportunities for prosperity, however users should be vigilant in regards of the associated risks.

Weidmann delivered his comments at a news conference at a meeting of the G7 finance ministers and central bankers. “There is no reason to be alarmed but there is reason to be vigilant,” Weidmann stated.

Weidmann also spoke in favor of Facebook’s Libra cryptocurrency project. He specifically argued that global regulators should not suppress the project in its infancy, adding that digital currencies such as Libra can be attractive to consumers in the event that they deliver on their promise.

However, a range of other policymakers do not share Weidmann’s view on Libra, with French finance minister Bruno Le Maire saying that the G7 “cannot accept private companies issuing their own currencies without democratic control.”

Brad Sherman, a United States Democratic congressman, recently claimed that “Mark Zuckerberg is sending a friend request to oligarchs, drug dealers, human traffickers and terrorists” by launching Facebook’s Libra cryptocurrency.

Notably, at the G7 conference, the Financial Action Task Force — a G7-initiated intergovernmental organization that promotes legal, regulatory and operational measures that aim to fight money laundering on a global scale — approved a new, global cryptocurrency payments network that would be similar to Japan’s proposed SWIFT.

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Trump vs Bitcoin, Japanese Exchange Hacked | Coffee and Crypto

In the premiere episode of the new Cointelegraph series “Coffee and Crypto,” Olivia Capozzalo and Molly Jane Zuckerman discussed the latest news in the crypto industry.

In the premiere episode of the new Cointelegraph series “Coffee and Crypto,” head of editorial Olivia Capozzalo and head of news Molly Jane Zuckerman discussed the latest news in the cryptocurrency industry.

Latest news in the cryptocurrency industry

In the video, Capozzalo and Zuckerman discuss United States President Donald Trump criticizing Bitcoin (BTC) and Facebook’s Libra stablecoin, the European Central Bank’s recent statements about Bitcoin, and whether BTC is a currency. Zuckerman also talked about the hack of Japanese exchange Bitpoint, which yesterday published the breakdown of crypto assets stolen in the 3 billion yen (~$27.8 million) hack of its platform earlier this month. 

Capozzalo spoke about an American computer scientist that has managed to mine Bitcoin on a 52-year-old Apollo guidance computer. Those are the very same computers that were used to navigate the first moon landings by the National Aeronautics and Space Administration in the 1960s.

Cointelegraph’s head of editorial shared a story about how she first learned about cryptocurrencies in 2013, but wasn’t a fan initially.

“I felt like Trump,” Capozzalo said, in reference to the president’s recent tweets about crypto. 

As Cointelegraph reported earlier this month, Donald Trump voiced his opposition to cryptocurrencies as a whole, citing Bitcoin and Libra specifically. He stated that he is “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”

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EU Central Bank Won’t Add Bitcoin to Reserves — Says Its Not a Currency

Philip Green triggered the wrath of crypto proponents online as the ECB says it has no plans to add bitcoin to its reserves.

The European Central Bank (ECB) doubled down on its dismissive stance on bitcoin (BTC) July 9, refusing to recognize it as currency in a Q&A session.

Responding to a private query as part of its regular interactive Twitter program, which it administers under the hashtag ‘#AskECB,’ the bank said it had no plans to add bitcoin to its reserves.

“Bitcoin is not a currency, it rather is an asset and it is very volatile,” officials wrote quoting chief economist, Philip Lane. 

The response continues the ECB’s underwhelming reaction to cryptocurrency it has already propagated in other public statements. 

In May this year, a report dubbed “Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures” concluded the entire phenomenon had little impact on the traditional economy. 

Previously, the European Union’s reserve bank had also come out bearish on the idea of issuing a digital currency of its own, in contrast to noises now coming from China and several other states. 

Predictably, cryptocurrency proponents had little time for Lane’s brief statements on bitcoin this time around. 

“Bitcoin is money,” Pierre Rochard, a software engineer known for his advocacy, responded on Twitter to much appreciation.

Another user reproduced the ECB’s own inflation calculator, showing the decreasing purchasing power of the euro since its introduction twenty years ago. 

That, they argued, was infinitely worse than the temporary bouts of volatility seen with bitcoin.

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Analyst: Hold Bitcoin (BTC), Europe’s ECB is Political And Economy In Tatters

Bitcoin BTC Europe

If you are in Europe, hold Bitcoin (BTC). The European Central Bank (ECB) will soon stop considering BTC as a “highly risky asset”, acknowledging its potential of “shaking the [financial] system” as it tries to stabilize the economy which is already in tatters.

This move will be facilitated by the presence of a new ECB head, Christine Lagarde, who has been proposed to take over the outgoing head, Mario Draghi. Notably, Lagarde, who is a Managing Director at the International Monetary Fund (IMF), considers Bitcoin and other cryptocurrencies more positively compared to Draghi.

For example, in April, Lagarde told CNBC that:

“The role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever…that is clearly shaking the system.”

EU Economy on The Precipice

Notably, the IMF managing director is taking over the leadership of ECB when the economy of the European Union (EU) is in bad shape. The economy is majorly suffering from inflation and heading towards a recession. As noted by Raoul Paul, an analyst, banks in the UK, Spain, France, among other European countries are “in free fall, with [their] own cliff of death approaching.”

Paul continues:

“So, the knock-on effects are all lining up to push one bank after another off the cliff of death…and there ain’t a thing the ECB can do about it, as they will have only one mandate – inflation. They have to cut rates. And this is why Christine Lagarde has been brought in.”

ECB Going Political

According to the analyst, for the EU economy to be back on its two feet, the incoming ECB head must have a political side. Additionally, the ECB will also need to force fiscal reforms. Lagarde is the perfect match for the post, considering she has a background in politics and is not a traditionally trained economist as her predecessors.

Her bio on the IMF website states that she held the position of a Finance Minister in France between June 20017 and July 2011. Additionally, for two years, Lagarde served as France’s Minister of State for Foreign Trade.

Apart from being a politician, and before
joining the IMF, Lagarde:

“Had an extensive and noteworthy career as an anti-trust and labor lawyer, …has degrees from Institute of Political Sciences (IEP) and from the Law School of Paris X University, where she also lectured.”

Unfortunately, even with the desired background
needed to turn the EU economy around, it will take time since ECB will need to
avoid capital by buying any credit instrument. However, the ECB must not
approach the stabilization process in a way that would give more powers to the
dollar since a strong dollar is capable of collapsing the banks. The effect is
likely to spill over to the global economy.

Make Room for Bitcoin (BTC)

To stay safe during the stabilization process,
Paul recommends:

“Own bonds, dollars, Bitcoin, and Gold. The former two are the beneficiaries of current needs, and the latter two are the high-gamma options on this escalating to an extreme policy event.”

Experts have already pointed out that
Lagarde’s position at the ECB will have a positive impact on the overall crypto
industry. For instance, the senior market analyst at eToro,
Mati Greenspan, notes:

“Indeed, Christine Lagarde who is set to replace Mario Draghi on 1 November is extremely pro digital assets. Not Bitcoin, of course, but she has advocated already for state-backed cryptocurrencies as well as settlement tokens like XRP and JPM coin. We can expect that someone so crypto friendly in such a position will be good for the industry as a whole.”

The post Analyst: Hold Bitcoin (BTC), Europe’s ECB is Political And Economy In Tatters appeared first on Ethereum World News.

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Will Ripple and XRP Flourish Under Lagarde’s ECB Tenure?

ECB Ripple XRP

The world of cryptocurrencies will
remember Christine Lagarde as the IMF head that first acknowledged the
potential of digital currencies.  The
lawyer, and former French finance minister, has in the past said that crypto
“seeks to anchor trust in technology.”

However, just like any other banker,
Largarde has expressed some reservations over the disruptive nature of digital
currencies. She is a believer in regulation, saying,
“Proper regulation of these entities will remain a pillar of trust.”
Nevertheless, during her tenure at the International Monetary Fund’s M.D, she
has said that blockchain based currencies are indeed “shaking the
system.”

Lagarde Moving To ECB

The IMF head is now headed to
Frankfurt for her new appointment as the European Central Bank (ECB) head.
Ripple fans believe this is another bullish occurrence for XRP. Christine,
while acknowledging the power of crypto, has been a tad offhanded about most
tokens, perhaps due to her regulatory stance.

She, however, has openly praised Ripple and Circle. Earlier in the year, in the Paris Fintech Forum, she warned banks to adapt to new technology or die. The IMF head warned the legacy banking system that they were in danger of not just disruptive change but self-induced cannibalization. She presented Ripple and Circle as a helpful way out for banks planning to catch up with the technology change.

Her predecessor at the ECB, Mario Draghi is a crypto bear. He has described digital currencies as “highly risky.” Saying that they should not be characterized as currencies, Draghi has done what he can to alienate central banks and the ECB from crypto experimentation. Largarde’s stance on these assets is, therefore, a fresh of breath air in a market where the winds of change are blowing. 

At the 2018 Singapore Fintech
Festival, she mentioned that the IMF and some central banks are warming up to
the idea of digital currencies. The IMF has additionally released a paper
on the issue. She caps the matter by saying, “I believe we should consider
the possibility to issue digital currency. There may be a role for the state to
supply money to the digital economy”.

Ripple’s Reach

The Ripple managerial team has held
many high-level discussions with Lagarde. It is highly probable then that the
new ECB head will bring her positive attitude towards Ripple and XRP to the
ECB. If she does, the blockchain startup will be set up for global blockchain
payments domination.

Ripple and XRP have even more friends in high places. The blockchain startup has a good rapport with Bretton Woods institutions. The World Bank, for instance, has praised Ripple’s xRapid platform.

As an illustration, Marco Nicoli, the institution’s senior financial sector specialist, has called it a “potentially transformational technology.” Nicoli has lauded the prowess of distributed ledger technologies in bringing change, efficiency, and affordable costs in transfers.

Ripple has also caught the eye of the White House. With China hogging half of the world’s Bitcoin mining setups, the Trump administration has sought an American competitor to back. Besides, it has given the States some crypto clout with Bill Clinton, for instance, becoming a keynote speaker in last year’s SWELL Conference. The real-time gross settlement platform has also collaborated with SBI Holdings, the Japanese financial services giant. 

Forming SBI Ripple Asia, the partnership has culminated in a consumer-focused payment app powered by Ripple. MoneyTap brings to the market blockchain powered near instant, affordable, and efficient remittance services.

The post Will Ripple and XRP Flourish Under Lagarde’s ECB Tenure? appeared first on Ethereum World News.

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European Central Bank Exec Calls for Fast Regulatory Action Regarding Libra

European Central Bank executive board member Benoit Coeure said that financial regulators must act fast to prepare for Facebook’s Libra stablecoin.

European Central Bank executive board member Benoit Coeure said that financial regulators must act fast to prepare for Facebook’s Libra stablecoin, Bloomberg reports on July 7.

Per Bloomberg, Coeure argued on Sunday in Aix-en-Provence in southern France that allowing for the development of new financial services and asset classes in a regulatory void is irresponsible. He concluded:

“We [financial regulators] have to move more quickly than we’ve been able to do up until now.”

According to Coeure, the development of digital assets has exposed gaps in current financial regulations, and underlines banks’ slow rate of adoption of new technologies:

“All these projects are a rather useful wake-up call for regulators and public authorities, as they encourage us to raise a number of questions and might make us improve the way we do things.”

The ECB has generally approached crypto assets with caution, with one bank official predicting that crypto will end up as a “complete load of nonsense” in January. The bank has also discussed the possible benefits and drawbacks of central bank digital currencies.

Coeure’s reaction is in line with the predictions of Jeremy Allaire, co-founder and CEO of payments company Circle. In an interview with Bloomberg released earlier this week, Allaire noted that he hopes Libra will trigger the development of national policies concerning digital assets.

Last week, the United States House of Representatives Committee on Financial Services requested that Facebook and its partners to stop development on the Libra stablecoin. The request came on the heels of a letter from various advocacy groups, urging Congress to implement a moratorium.

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European Bank Official Discusses Potential Benefits of Central Bank Digital Currency

An ECB official, Vitas Vasiliauskas, highlighted the benefits of central bank digital currencies but stressed caution in a recent speech.

A European Central Bank (ECB) official highlighted the benefits of central bank digital currencies (CBDC) while stressing caution in a speech published by the Bank of International Settlements on May 27.

Vitas Vasiliauskas — Chairman of the Board of the Bank of Lithuania and a member of the Governing Council of the ECB — delivered his speech at the Reinventing Bretton Woods Committee conference “Managing the Soft Landing of the Global Economy.” Vasiliauskas specifically considered whether CBDCs should be wholesale, retail, or both.

Vasiliauskas stressed that CBDCs should serve as a medium of exchange, a means of payment and a store of value, reflecting qualities of the current forms of central bank money, but not a conventional reserve account or a private crypto asset. In the event of the release of the retail CBDC, it would be available to the general public, while access to the wholesale one would be open to financial institutions only.

Among potential benefits from the CBDC, Vasiliauskas named increased efficiency of payments and securities settlements, and reduction of counterparty credit and liquidity risks. The interest-bearing retail CBDC could purportedly improve the transmission of monetary policy and strengthen the pass-through of the policy to deposit and lending rates. However, Vasiliauskas further warned:

“The amount of cash in circulation is declining in some countries. This could mean that one day, even if it seems like a distant prospect — every single person will have to have an account with a private entity just to make payments. Unfortunately, this may lead to increased levels of financial exclusion.”

A retail CBDC would thus ensure that people continue having access to central bank money, Vasiliauskas said, and could eventually have positive effects on financial stability. In the meantime, one of the key issues the central bank should consider is the CBDC’s adherence to the money laundering requirements and the way it can apply the anti-money laundering (AML) standards to anonymous forms of CBDC.

Earlier in May, the ECB released a report on the potential impact of digital currencies on economic developments and monetary policy, where it specifically states that such implications could occur should cryptocurrencies became a credible substitute for cash and deposits, while currently they do not fulfil the functions of money.