Andrew Griffith MP, the Economic Secretary to the Treasury, recently spoke at The City UK’s Annual dinner. In his speech, he outlined his vision to enhance growth and competitiveness within the financial services sector. With the aim of boosting the industry, Griffith emphasized the importance of implementing strategies that would drive economic expansion and improve the sector’s ability to compete globally. By addressing these issues, he hopes to create an environment that fosters innovation, attracts investment, and ultimately strengthens the UK’s position as a leading financial hub.
UK Unveils Plans to Regulate Crypto and Safeguard Consumer Interests
The plans being implemented aim to offer clear guidance and certainty to both consumers and businesses. This initiative seeks to address any confusion or uncertainty that may exist within the market. By providing a transparent framework, individuals and companies will have a better understanding of the rules and regulations they need to adhere to. This will enable consumers to make informed decisions and businesses to operate in a more efficient and compliant manner. Ultimately, these plans aim to create a more stable and predictable environment for all stakeholders involved.
Accessing Our Funds Anytime, Anywhere with the Digital Euro
Fabio Panetta, Member of the Executive Board of the ECB, addressed the Committee on Economic and Monetary Affairs of the European Parliament to discuss the investigation into a digital euro. The ECB has prioritized involving the European Parliament in the investigation phase and has valued the feedback received from public and private stakeholders. The shift towards digital payments is evident, with cash payments in the euro area decreasing and digital payments becoming more popular. However, people still value the option to pay with public money. A digital euro would provide Europeans with a convenient and accessible means of payment, complementing cash and other electronic payment methods. The ECB aims to design a digital euro that is easily usable throughout the euro area, with a focus on universal accessibility and usability. The digital euro would not replace other payment methods but would offer additional benefits and functionalities. Privacy and data protection are important considerations, and the ECB is working on solutions that preserve privacy by default and give individuals control over their payment data. The ECB is also exploring different options for using a digital euro, including integration with existing banking platforms and the development of a digital euro app. The work agenda for 2023 includes finalizing the design options, prototyping, and seeking input from the market. The decision to issue a digital euro will be taken at a later stage, following the adoption of a legislative act by the Parliament and the Council of the EU.
Exploring Potential Technical Solutions for a Digital Euro through Market Research
The European Central Bank (ECB) is conducting market research as part of the investigation phase of the digital euro project. The purpose of this research is to gather information on the technical design options for potential digital euro components and services. The findings from this research will be included in an implementation plan, which will be part of the final report to be released in autumn 2023. The ECB Governing Council will use this report to make an informed decision on whether to proceed with a realisation phase for the digital euro. However, the final decision on issuing a digital euro will be made at a later stage. Participation in the market research is voluntary and will not affect eligibility for future procurement procedures. The main document provides detailed information about the research, while Annex 1 outlines a potential design for the digital euro. Annex 2 contains a set of questions for obtaining technical input, cost estimates, and time estimates. The deadline for submitting responses to Annex 2 is Friday, 17 February 2023. All responses will be treated confidentially, and respondents will not be notified of the assessment outcome. The Eurosystem may reach out to a limited number of respondents for further clarification or meetings.
Collaboration in Financial Services: Joint Statement on the Seventh Meeting of the UK-US Financial Regulatory Working Group
The HM Treasury and U.S. Department of the Treasury have issued a joint statement regarding the seventh meeting of the UK-U.S. Financial Regulatory Working Group. This working group aims to enhance regulatory cooperation between the two countries in the financial sector. The meeting provided an opportunity for both sides to discuss various issues related to financial regulation and share updates on ongoing initiatives. The joint statement highlights the commitment of both the UK and the U.S. to deepen their collaboration in areas such as market access, fintech, and sustainable finance. This collaboration is crucial for promoting financial stability, supporting economic growth, and ensuring the resilience of the global financial system.
Invitation to Participate in the Digital Euro Scheme Rulebook Development Group
The European Central Bank (ECB) and Eurosystem are seeking experienced experts in the payments/finance field to contribute to the development of a rulebook for a digital euro scheme. This initiative follows the decision of the ECB’s Governing Council to launch the investigation phase of the digital euro project. The Eurosystem has explored various options for the distribution of a digital euro and considers a digital euro scheme as the most suitable option to achieve the objectives of a digital euro and leverage the strengths of both the public and private sectors.
ECB releases update on the digital euro investigation phase: Second progress report
The European Central Bank (ECB) has released its second progress report on the investigation phase of a digital euro. This report highlights the advancements made since the first progress report in September 2022. The report focuses on a new set of design and distribution options that have been approved by the Governing Council. It also outlines the roles of the Eurosystem and supervised intermediaries in the digital euro ecosystem. Intermediaries will be responsible for onboarding end-users, conducting anti-money laundering checks, and providing consumer-facing services. The settlement model will determine how online and offline transactions are settled, while the funding and defunding process will allow users to convert cash and money from bank accounts into digital euro. The report also emphasizes the importance of a digital euro scheme to ensure that all citizens in the euro area can make and receive payments digitally. In 2023, the ECB will further evaluate various design and distribution options and present the overall design to the Governing Council in the second half of the year. The ECB is actively engaging with stakeholders and seeking feedback to ensure that the digital euro meets the needs of users. The investigation phase of the digital euro project was launched by the ECB and euro area national central banks in October 2021. The outcome of this phase will be reviewed by the Governing Council in autumn 2023, and a decision will be made on whether to proceed to a realisation phase. For media inquiries, please contact Nicos Keranis at +49 172 758 7237.
Upcoming Digital Euro Market Research Preview
In January 2023, the European Central Bank (ECB) will be conducting market research as part of the investigation phase of the digital euro project. This research aims to gather information on the technical design options for potential digital euro components and services. The insights obtained from this research will be crucial in developing an implementation plan, which is a key outcome of the investigation phase. It is important to note that no decision has been made yet regarding the actual realization of the digital euro or its issuance.
Decentralised Finance (DeFi) and the World of Cryptocurrencies
According to CoinGecko, the cryptocurrency landscape is currently comprised of over 10,000 crypto tokens. This vast number reflects the significant growth and popularity of cryptocurrencies in recent years. With a wide range of tokens available, investors have a diverse selection to choose from, each with its own unique features and potential for growth. The abundance of crypto tokens also highlights the increasing interest and participation in the cryptocurrency market, as more individuals and institutions are exploring this alternative form of investment. As the cryptocurrency industry continues to evolve, it is expected that the number of tokens will continue to increase, offering even more opportunities and options for investors.
Materials for the digital euro simulation project
The European Central Bank (ECB) is currently conducting a digital euro prototyping exercise, allowing market participants to develop front-end prototypes that can be integrated with the Eurosystem’s back-end infrastructure. The ECB’s Executive Board Member, Fabio Panetta, stated in a letter to the Chair of the Committee on Economic and Monetary Affairs, European Parliament, that the publication of documents related to this exercise aims to promote transparency and cooperation. These documents have been provided to the five selected companies that were chosen after a public call for expression of interest in April 2022. The published material includes a cover note, a technical onboarding package for digital euro prototyping, a technical onboarding package for front-end prototype providers, and a core settlement application programming interface. Market participants can use this information to develop front-end prototypes compatible with the Eurosystem’s infrastructure while still having the freedom to innovate. It is important to note that the design of the prototype does not assume any specific technology choice, and it does not commit the Eurosystem to providing a digital euro. The purpose of these prototyping experiments is to enhance the Eurosystem’s understanding of digital euro technologies, and there are no plans to reuse the prototypes in future phases of the digital euro project. The prototyping exercise is expected to be completed by the first quarter of 2023. For more information on the digital euro project, click here.