Daily Digest - 25th April 2023

Headlines

▌ECB Board Member: Digital Euro May Be Vetoed

European Central Bank board member Fabio Panetta, speaking to the parliamentary committee on economic and monetary affairs on Monday, said members of the European Parliament could still prevent the ECB from issuing a digital euro as lawmakers voiced growing concerns about the value of a central bank digital currency (CBDC).

While the ECB has previously said it will decide whether to proceed with a digital euro later this year, Fabio Panetta appeared to acknowledge that political opposition could still be a decisive hurdle. “If that veto is done at the political level – through the European Parliament and the Council of the European Union, which represents its member states – I don’t see any chance for the ECB to autonomously or independently decide to make progress,” Panetta said.

Policies

▌Republicans in the US House of Representatives want to move stablecoins out of the scope of SEC power

Republicans in the U.S. House of Representatives have proposed new draft stablecoin legislation that would strip the agency of its jurisdiction over payment stablecoins.

As negotiations continue on a comprehensive framework for stablecoins, the draft comes as the U.S. Securities and Exchange Commission investigates BUSD, the stablecoin shared between digital asset infrastructure firm Paxos and international cryptocurrency exchange Binance.

The bill would transfer power over stablecoins to federal and state banks and credit union regulators. Unlike previous bipartisan negotiations, the bill would no longer address algorithmic stablecoins or require research into central bank digital currencies.

Instead, the bill will focus narrowly on stablecoins used for payments and is intended to be a companion document to legislation governing the U.S. digital asset market. The move to limit the SEC’s role is not surprising, given criticism from both industry executives and congressional Republicans of SEC Chairman Gary Gensler's approach to digital assets.

Cryptocurrency

▌Standard Chartered Bank: The Bitcoin winter has passed and will rise to $100,000 next year

Geoff Kendrick, head of digital assets at Standard Chartered Bank, said in a new report that Bitcoin may benefit from recent market developments.

That includes turmoil in the banking sector and stabilisation in risk assets as the Fed draws to a close in its tightening cycle.

"While sources of uncertainty remain, we believe the path to the $100,000 mark is becoming clearer.”

He added that Bitcoin could reach this level by the end of next year.

▌Indian Finance Minister: Encryption regulation does not mean technology control

Indian Finance Minister Nirmala Sitharaman said at an interactive meeting in Karnataka, India, that the consensus of the G20 today is that a global standard may have to be created.

We all have to work together on this, otherwise regulating crypto may not be effective.

But this does not mean that we have to control distributed ledger technology, it has its advantages and its potential.

Other Asian countries, such as Singapore, also see potential for DLT use cases, such as asset tokenization and cross-border payments, but cryptocurrencies have no fundamental value. When it comes to technology-driven encrypted assets, no country can control it alone, because technology has no borders.

The International Monetary Fund's paper on cryptocurrencies and the ways they affect macroeconomic stability, as well as the Financial Stability Board's report on the financial stability of crypto-assets, will be discussed at the G20 meeting in July, when finance ministers and central bank governors will hold a meeting.

▌Meta to cut 343 jobs in New York City

According to a document from the New York State Department of Labor, Meta Platforms will lay off 343 employees in its New York City office, and the employees were notified on April 19.