‘We don’t have much time left’ to regulate crypto, says Bank of France governor

“We in Europe need to move as quickly as possible or risk an erosion of our monetary sovereignty,” said Francois Villeroy de Galhau.

Bank of France governor Francois Villeroy de Galhau said that Europe should make crypto regulation a priority or risk digital assets challenging its monetary sovereignty.

At a Paris Europlace financial conference today, Villeroy said he believed the European Union only had “one or two years” left in which to establish a regulatory framework for cryptocurrencies. To not act, according to the central bank governor, would “risk of an erosion of our monetary sovereignty” and potentially weaken the euro.

“I must stress here the urgency: we do not have much time left, one or two years,” said Villeroy. “On both [digital] currencies and payments, we in Europe need to move as quickly as possible.”

Villeroy called on the EU “to adopt a regulatory framework in the coming months,” given the growing role cryptocurrencies are playing in regional markets. The use of cash declined during the first few months of the pandemic, a trend that Villeroy said could lead to “marginalization of the use of central bank money.”

Related: Bank of France Is Closely Watching Stablecoin Developments, Says Governor

The Bank of France governor has previously warned regulators against the potential risk of cryptocurrencies, including stablecoins and central bank digital currencies, or CBDCs. In September he said big tech companies could potentially build “private financial infrastructures and monetary systems” — including issuing their own stablecoins — which could adversely impact financial sovereignty in the EU for decades.

In January, the bank completed a pilot program for its own CBDC, later reporting investors had purchased and sold 2 million euros — roughly $2.4 million at the time — worth of simulated shares. The Bank of France has said it will conduct other test runs for the digital currency this year. 

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Bank of Israel deputy governor confirms digital shekel pilot is underway

Despite the pilot, the central bank’s deputy governor said he was apprehensive about launching a full-scale CBDC in Israel, and referred to Bitcoin as a “pyramid scam.”

The Bank of Israel has reportedly already issued a central bank digital currency through a pilot test of a digital shekel.

According to a Monday report from the Jerusalem Post, Bank of Israel deputy governor, Andrew Abir, said the financial institution had started to conduct a pilot program for a digital shekel. Speaking at a conference of the Fair Value Forum of IDC Herzliya, Abir added that he was not optimistic about the bank issuing a central bank digital currency, or CBDC, despite the fact he confirmed a pilot test was underway.

“I had previously estimated that the chance of having a CBDC within five years is 20%,” said Abir. “My estimate has increased a bit in the last year, mainly because other countries are advancing with it too, but still there is less than a 50% chance.”

The Bank of Israel has made no formal announcement on its website regarding the issuance of a digital shekel at the time of publication. Last month, the financial institution said it was preparing an action plan to explore the benefits of a CBDC on the Israeli economy, adding it would be prepared to do so should the benefits “outweigh the costs and potential risks.”

Related: Israel’s central bank floats possible digital shekel with new action plan

At the time, the central bank said it may consider issuing a CBDC if such meets the needs of the future digital economy and provides more efficient cross-border payments. Bank of Israel also hopes to reduce the use of cash and ensure the public can make payments with “a certain level of privacy.”

“The option for a CBDC is still being examined, and when we made our statement last month, it was not to say what we are doing, but rather to share what we do not know and receive feedback from the public,” said the deputy governor. He added that the country’s banks “will still have an important part in the entire payment system” following any potential rollout of a digital shekel.

Despite his seeming willingness to eventually integrate a CBDC in the country’s economy, Abir criticized Bitcoin (BTC) as a means of paymen:

“What we are talking about is a payment system. Bitcoin is not a payment system, and it is not a currency. In the best situation, it is a financial asset, and in the worst case, it is a pyramid scam.”

Israel’s central bank begin exploring the introduction of a CBDC four years ago with the establishment of an interdepartmental group tasked with exploring the matter. In 2018, the team recommended against the Bank of Israel issuing a digital currency, saying “no advanced economy has yet issued digital currency for broad use.”

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Nigeria’s central bank not discouraging people from trading crypto, says governor

The governor of the Central Bank of Nigeria has seemingly softened his stance on crypto for individuals, if not banks.

Godwin Emefiele, governor of Nigeria’s central bank which previously banned banks from servicing crypto exchanges, has reportedly clarified the bank’s position on the use of cryptocurrencies in the country.

According to local news outlet TodayNG, Central Bank of Nigeria, or CBN, deputy governor Adamu Lamtek said on behalf of Emefiele that the bank had not banned Nigerian residents from buying, trading, or selling crypto, but “[protected] the banking sector from the activities of cryptocurrencies.” Lamtek spoke at a seminar for the Finance Correspondents and Business Editors in the capital, Abuja.

“The CBN did not place restrictions from use of cryptocurrencies and we are not discouraging people from trading in it,” said Emefiele. “What we have just done was to prohibit transactions on cryptocurrencies in the banking sector.”

The statement follows the CBN announcing last month in a circular that it had placed a ban on all regulated financial institutions from providing services to crypto exchanges in the country. The ban directed all commercial banks to close accounts belonging to crypto exchanges and other businesses transacting in cryptocurrencies in Nigeria, warning of “severe regulatory sanctions” for any institution in breach of the rule. Some account holders at Nigeria’s Access Bank have already reported their accounts have been closed.

Emefiele previously referred to cryptocurrencies as “not legitimate money” with no place in Nigeria’s monetary system. The governor said at the time the central bank was doing its due diligence to better understand the implications of the emerging space.

However, many regulators and crypto enthusiasts in Nigeria have criticized the ban. Some lawmakers in the Nigerian Senate have proposed inviting the CBN governor and major crypto stakeholders to a hearing to discuss issues related to crypto regulations in the country.

Since the CBN introduced the crypto ban, the price of Bitcoin (BTC) has been trading at a premium in the country. Valued at $57,349 in the United States, data from crypto exchange Luno currently shows BTC has risen to a more than 70% premium in Nigeria at a price of $97,509.

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177-Year-Old Swiss Bank Bordier to Offer Bitcoin and Other Crypto Trading Services

177-Year-Old Swiss Bank Bordier to Offer Bitcoin and Other Cryptocurrencies Trading ServicesA 177-year-old bank in Switzerland has enabled cryptocurrency trading within its services, with expectations to expand. Bordier & Cie SCmA added bitcoin and other cryptos to its list of services by partnering with a well-known domestic crypto player. Bordier Customers Can Also Buy and Hold Other Cryptos According to the announcement, the Swiss bank, founded […]
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Bitcoin Has No Intrinsic Value, Asset Is Too Volatile, Says Bank of Korea Governor

Bitcoin Has No Intrinsic Value, Asset is Too Volatile, Says Bank of Korea GovernorBank of Korea Governor Lee Ju-yeol has said that crypto assets like bitcoin have no intrinsic value – put simply, a measure of what an asset is actually worth. ● Speaking in the National Assembly on Feb. 23, Lee forecast that bitcoin (BTC) will see increased price swings going forward, the local news agency Yonhap […]
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