The European Central Bank warns in a new working paper that as stablecoin adoption grows, deposits may leave banks, affecting lending and monetary policy transmission. The European Central Bank said increasing stablecoin use may pull money out of bank deposits and weaken the way monetary policy flows through to lending, according to a new ECB working paper. Growing adoption of stablecoins, which are digital assets often pegged to currencies such as the US dollar or euro, is expected to draw funds away from traditional bank deposits, the ECB said in its latest working paper series, “Stablecoins and Monetary Policy Transmission,” released Tuesday. “Our analysis shows that rising interest in stablecoins is linked to a measurable decline in retail bank deposits and a reduction in lending to firms,” ECB staff said, adding that stablecoins can reduce the amount of credit banks provide to the real economy. Read more
21Shares debuts the Strategy Yield ETP on Euronext Amsterdam on Thursday, giving Europe regulated access to Strategy’s preferred stock, which is heavily backed by Bitcoin. Crypto exchange-traded product (ETP) provider 21Shares has launched an investment product giving European investors access to a preferred stock issued by Michael Saylor’s Strategy, the world’s largest public holder of Bitcoin. The asset manager will list its 21Shares Strategy Yield ETP under the ticker “STRC NA” on Euronext Amsterdam on Thursday, the company said Wednesday. The ETP is available to institutional and retail investors, offering a dividend backed by Strategy’s Bitcoin (BTC) treasury, which currently holds 717,722 BTC, valued at around $47 billion. With dividends set at a variable 11.25% annualized rate, the ETP represents one of the earliest structured, BTC-backed corporate securities available to European investors. Read more
ECB president Christine Lagarde is a crypto skeptic, but her likely successors are no more enthusiastic about cryptocurrencies. European Central Bank (ECB) president Christine Lagarde is stepping down sometime before the French presidential election next year. Under her leadership, the ECB has consulted on the Markets in Crypto Assets (MiCA) legislation that defined the crypto landscape in the European Union. The preeminent European bank also began work on the digital euro — the next iteration of the Eurozone’s currency. But there is still work to be done on crypto policy in Europe. MiCA does not, in its current form, regulate decentralized finance (DeFi), and policymakers at the ECB are still deliberating over the digital euro’s final details. Read more
The Dutch electronic money issuer will act as a BIN sponsor for fintech partners, linking regulated dollar- and euro-denominated tokens to mainstream card rails. Dutch payments company Quantoz Payments has become a principal member of Visa, enabling it to issue virtual debit cards backed by its regulated e-money tokens and sponsor third-party fintechs seeking to offer stablecoin-linked payment products across Europe. Under the agreement, Quantoz will be able to issue Visa-branded virtual cards tied to balances held in its USDQ, EURQ and EURD e-money tokens, allowing users to spend those funds online, in stores and through mobile wallets. The company will also act as a BIN sponsor, enabling fintech partners to embed card issuance directly into their platforms. Read more
The move strengthens institutional support for 21Shares’ multibillion dollar digital asset investment platform and broadens its regulated staking capabilities. BitGo Holdings and 21Shares said Thursday they have expanded their existing partnership to include custody and staking services supporting 21Shares’ crypto exchange-traded products (ETPs) for investors in the United States and Europe. Under the agreement, BitGo will deliver qualified custody, trading and execution services and integrated staking infrastructure for 21Shares’ US exchange-traded funds and global ETPs. The arrangement also provides 21Shares with access to liquidity across electronic and over-the-counter markets, according to the announcement. BitGo said the services will be delivered through its regulated entities in the US and Europe, including its federally chartered trust bank approved by the Office of the Comptroller of the Currency (OCC) and its MiCA-licensed operations authorized by Germany’s Federal Financial Supervisory Authority. ...