Digital Euro to Preparation Phase, Finland's Digital Payment, Upbit Gets Singapore License, and OFAC to Target Hamas Facilitators

ECB Advances Digital Euro to Preparation Phase

The European Central Bank (ECB) announced the transition to the preparation phase of digital euro. This development comes after a meticulous investigation phase initiated by the Eurosystem in October 2021, which sought to explore the design and distribution models for a digital euro. The outcomes of this investigative phase have been distilled into a comprehensive report, outlining a vision for the digital euro that prioritizes broad accessibility through regulated intermediaries, such as banks.

During the preparation phase, the ECB will concentrate on finalizing the digital euro rulebook, selecting suitable providers, and conducting testing to ensure that the digital euro aligns with Eurosystem standards and user requirements. Importantly, public engagement and stakeholder involvement will continue during this phase.

It's essential to underline that the initiation of the preparation phase doesn't constitute a definitive decision to issue a digital euro. The ultimate verdict will be reached only after the European Union's legislative process concludes, and the ECB remains open to adjustments based on the outcomes of legislative deliberations.

In addition to its consumer benefits, the digital euro also promises to fortify resilience, competition, and innovation in the European payments sector. It is set to provide a pan-European payment solution under European governance, strengthening financial infrastructure, reducing costs, and fostering innovation for the benefit of financial institutions and their customers.

Finland's Digital Euro Discussion and Changing Payment System

The discussion surrounding the digital euro is gaining momentum, along with the decreasing use of cash and the growing reliance on the world's largest payment processing networks, Visa and MasterCard. Tuomas V?lim?ki, a board member at the Bank of Finland, emphasized that despite the seemingly diverse range of payment alternatives, many transactions ultimately pass through the same Visa or MasterCard channels. While these global giants offer efficient and dependable payment systems, there's a growing concern about allowing such a critical societal function to become monopolized.

V?lim?ki argued that in payments, as in other sectors, the presence of alternatives enhances reliability and prevents prices from escalating. The digital euro aims to be available to all Eurozone citizens and function in diverse scenarios. However, the digital euro has also faced criticism, with the banking sector and regulators expressing concerns about its potential impact on commercial sector deposits and the possibility of a bank run during crises. To address these concerns, the European Central Bank (ECB) has indicated that it would impose a cap on the amount of digital euros an individual can hold.

Despite these concerns, the Finnish Commerce Federation welcomes the progress of the digital euro project, believing it is essential for promoting competition and reducing the cost of retail payments. They view the digital euro as a European alternative to international digital payment methods that could lead to cost savings for retail companies and consumers while enhancing the security of payment systems.

Upbit Gets Green Light for Singapore License

Upbit, a leading cryptocurrency exchange, has achieved a significant milestone in its expansion efforts. The Singapore entity of Upbit has received in-principle approval from the Monetary Authority of Singapore (MAS) for a Major Payment Institution (MPI) license. This approval enables Upbit Singapore to continue offering digital payment token services to institutional investors while it awaits the issuance of the full license.

The announcement, made on 16 October 2023, marks a pivotal moment for Upbit's presence in Singapore. "Since 2018, we have been building solid foundations for a robust digital asset business in Singapore, the leading financial hub in Asia. This approval from MAS is a strategic milestone for us to deepen our presence in Singapore, which is at the forefront of digital asset innovation. Singapore, as our global powerhouse, unlocks new capabilities for retail, institutional, and infrastructure-focused businesses" said Alex Kim, founder and CEO of Upbit Singapore.?

This approval reflects Singapore's ongoing commitment to fostering a conducive regulatory environment for the cryptocurrency industry, making it an attractive destination for blockchain and cryptocurrency companies. Upbit's expansion into Singapore is a testament to the growing interest in the Asian market and the need for regulatory compliance in order to establish a secure and reputable presence.

OFAC Sanction Update to Target Hamas Facilitators

The U.S. Department of the Treasury has enacted new sanctions aimed at disrupting Hamas's financial network and limiting its access to funds from partners in various Arab regions, such as Algeria, Sudan, Turkey, and Qatar. These sanctions specifically target individuals and entities associated with the Hamas network, including financial facilitators, portfolio managers, and a Gaza-based virtual currency exchange.

The OFAC's actions specifically target individuals overseeing assets within a secretive Hamas investment portfolio, a Qatar-based financial facilitator with deep links to the Iranian regime, a prominent Hamas commander, and a Gaza-based virtual currency exchange and its operator. To date, the Treasury has targeted nearly 1,000 individuals and entities connected to terrorism and terrorist financing by the Iranian regime and its proxies, including Hamas, Hizballah, and other Iran-aligned terrorist groups in the region.

The sanctions on Buy Cash, a Gaza-based virtual currency exchange, were instigated following the seizure of one of its addresses linked to prior Hamas fundraising efforts. Buy Cash has also reportedly facilitated transfers to other Hamas affiliates, leading to its designation by the Treasury for providing material support to the organization.

Read more about OFAC Sanctions Hamas Members and Financial Facilitators

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