{"id":7858,"date":"2018-07-23T17:31:26","date_gmt":"2018-07-23T17:31:26","guid":{"rendered":"https:\/\/www.legitgambling.com\/news\/?p=7858"},"modified":"2018-07-24T15:07:16","modified_gmt":"2018-07-24T15:07:16","slug":"eu-parliament-central-bank-digital-currencies-will-reshape-crypto-sector","status":"publish","type":"post","link":"https:\/\/www.legitgambling.com\/news\/eu-parliament-central-bank-digital-currencies-will-reshape-crypto-sector\/","title":{"rendered":"EU Parliament \u2013 CBDC Will Reshape Crypto Sector"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-7859 alignleft\" src=\"https:\/\/www.legitgambling.com\/news\/wp-content\/uploads\/2018\/07\/european-parliament.jpg\" alt=\"\" width=\"380\" height=\"250\" \/>The European Parliament Committee on Economic and Monetary Affairs (ECON) <a href=\"https:\/\/www.finextra.com\/finextra-downloads\/newsdocs\/ipol_stu.pdf\">published a report on competition in fintech<\/a> sector on July 20. The report has opined that central bank-issued digital currencies (CBDC) could offer the much needed competition in the cryptocurrency sector.<\/p>\n<p><strong>The report<\/strong> says<\/p>\n<blockquote><p>\u201cThe arrival of permissioned cryptocurrencies promoted by banks, even by central banks, will reshape the current competition level in the cryptocurrency market, broadening the number of competitors.\u201d<\/p><\/blockquote>\n<p>Furthermore, the report designates cryptocurrencies such as Bitcoin (BTC) as <strong>\u201ctechnological and operational paradigms that are a source of disruption for the entire sector, including monetary policy and financial stability.\u201d<\/strong><\/p>\n<p>According to the report, other \u201cdisruptive and innovative applications\u201d of next generation technologies include <strong>\u201cAI, biometrics, cloud computing, blockchain, digital identity, RegTech, cybersecurity, internet of things (IoT), augmented reality.\u201d<\/strong><\/p>\n<p>The report also distinguishes between private <a href=\"https:\/\/www.legitgambling.com\/news\/digital-day-2018-aims-to-create-eu-projects-based-on-blockchains\/\">digital currencies and central bank-issued digital currencies (CBDC)<\/a> by saying that the latter is based on a <strong>\u201cconventional bilateral settlement with a trusted central party.\u201d<\/strong><\/p>\n<p>Furthermore, the report suggests the use of <strong>\u2018permissioned cryptocurrency systems\u2019<\/strong> to <strong>\u2018complement or substitute\u2019<\/strong> the existing currencies as closed cryptocurrency networks definitely require monitoring. The study concludes that CBDCs <strong>\u201cwill reshape the current competition level in the inter-cryptocurrency market.\u201d<\/strong><\/p>\n<blockquote><p>\u201cA potential inadequacy of traditional competition policy to address competition <a href=\"https:\/\/www.legitgambling.com\/cryptocurrency\">issues in the cryptocurrency markets <\/a>can be found, suggesting direct public participation through a central-bank digital currency as a remedy.\u201d<\/p><\/blockquote>\n<p>The ECON study also states that competition can be divided into <strong>\u201cinter-cryptocurrency market\u201d<\/strong> and <strong>\u201cintra-cryptocurrency\u201d<\/strong> market. While <strong>\u201cinter-cryptocurrency\u201d<\/strong> refers to competition between cryptocurrencies, <strong>\u201cintra-cryptocurrency\u201d<\/strong> denotes other service providers such as wallets and exchanges.<\/p>\n<p>As far as <strong>\u201cinter-crypto market\u201d<\/strong> competition is concerned, the report points that the <strong>\u201cpresence of network effects\u201d<\/strong> and large cryptocurrency users could make it difficult for new cryptos to pierce the market. The study further speculates the possibility of a rise in competition could lead to <strong>\u201cpotential collusive agreements between members of hypothetical cartels.\u201d<\/strong><\/p>\n<p>The report also states that in the <strong>\u201cintra-crypto market\u201d<\/strong>, wallets, payment providers, and exchanges could collate and keep others out of the market. Earlier this month, a new EU directive calling for the implementation of strict transparency rules for crypto currencies to prevent money laundering and terrorist financing came into force.<\/p>\n<p>Additionally, virtual currencies were also discussed for the first time this month at ECON\u2019s <strong>\u201cMonetary Dialogue\u201d<\/strong> session. As many as five reports were discussed on subjects ranging from cryptocurrencies and central banks to cryptocurrencies and the <strong>\u201cEurosystem.\u201d <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The European Parliament Committee on Economic and Monetary Affairs (ECON) published a report on competition in fintech sector on July 20. The report has opined that central bank-issued digital currencies (CBDC) could offer the much needed competition in the cryptocurrency sector. The report says \u201cThe arrival of permissioned cryptocurrencies promoted by banks, even by central [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[69,68],"tags":[],"class_list":["post-7858","post","type-post","status-publish","format-standard","hentry","category-bitcoin","category-cryptocurrency"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>EU Parliament \u2013 CBDC Will Reshape Crypto Sector<\/title>\n<meta name=\"description\" content=\"A study tabled by the European Parliament Committee has opined that central bank digital currencies could reshape competition in the crypto sector.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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