Central banks in Europe, the U.K. and India raised concerns about cryptocurrencies and cast doubt about the value of bitcoin as a means of payments. The U.K. payment regulator warned that it could take years before credit card fees can be capped again.
Big Tech
EU Parliament Meets Big Tech in Silicon Valley
From 23 to 27 May, a group of EU lawmakers were at Silicon Valley visiting tech companies, authorities and academics. The delegation from the European Parliament met with executives from tech companies including Google, Meta, Apple, Airbnb, eBay, PayPal and Uber to discuss the latest digital market advances, but also to get a closer look at the U.S. legislative work on eCommerce and platforms.
UK Launches Second Probe of Google Ad Practices
The U.K.’s antitrust watchdog said Thursday (May 26) that it had launched a new investigation into Google’s advertising technology practices, the second in as many months. According to the Competition and Market Authority (CMA), the probe will examine whether Google abused its role as the largest service provider in U.K.’s $2.3 billion (1.8 billion pounds) online ad industry.
India to Use WhatsApp to Access Digital ID Documents
India’s government has said its citizens will be able to access various official documents through the popular messaging app WhatsApp, a report said Tuesday (May 24). This will come with the integration with the country’s Digilocker digital documentation initiative into WhatsApp.
A report from Social Media Today noted that Meta would like WhatsApp to be as essential in India as WeChat is in China, where people need it to show their health status through barcodes in the app to get onto public transport or to travel.
UK Facial Recognition Ruling Could Spur Innovation
The U.K.’s data-privacy watchdog’s recent $10 million fine on facial recognition company Clearview AI Inc. could spur innovation in the space, including advancements in payments technology, as it “sets clearer ground rules for balancing software innovation with people’s right to privacy,” according to a report in The Wall Street Journal Wednesday (May 25).
The Information Commissioner’s Office alleged in its ruling that Clearview collected images of people without their consent, but experts say that fine won’t be enough to scare off innovators from using facial recognition. In fact, it could encourage them to push the boundaries of what’s possible.
Crypto
ECB: Crypto Could Shake Financial Stability
Financial stability is at risk as crypto-assets become more entangled with mainstream markets, the European Central Bank (ECB) said in its financial stability review on Tuesday (May 24).
While the recent increase in volatility hasn’t affected the overall global financial system, as more institutional investors become involved, the threat will increase exponentially. The market capitalization of unbacked crypto-assets dropped 1.3 trillion euros ($1.3 trillion) since November 2021 without upsetting financial stability, the ECB said, but if the current situation continues, a “point will be reached” when that will no longer the case.
Bank of England’s Governor Unconvinced About Bitcoin
Bank of England Governor Andrew Bailey cautioned the public about bitcoin and cryptocurrency. While admitting that blockchain, the underlying technology of cryptocurrencies, is important, Bailey said he is unconvinced about bitcoin as a means of payment. “In terms of payments, I don’t think it will be crypto in the sort of bitcoin sense of the term,” he said. “I don’t think that is really a practical means of payment.”
India’s Central Bank Governor Warns about Crypto after Stablecoin Collapse
The governor of the Reserve Bank of India (RBI), Shaktikanta Das, has been the latest top official warning about investing in crypto markets. Das discussed the crypto market downturn and the regulation of crypto assets in an interview with CNBC TV18. “We have been cautioning against crypto, and look at what has happened to the crypto market now,” the governor said.
Payments
Tackling Visa and Mastercard fees could take years, says UK regulator
It could be years before card fees from global payments duo Mastercard and Visa can be capped again to cut costs for retailers and consumers, Britain’s payments regulator told lawmakers on Wednesday, Reuters reported.
Interchange fees levied by Mastercard and Visa on retailers for consumer purchases from the European Union rose in 2021 after an EU cap ceased to apply in Britain following its departure from the bloc. Five months ago, the regulator told the committee that despite requests for information, the hike could not be explained by changes in the volume, value or mix or transactions.
UK Payment Regulator Expands Plan to Fight Authorized Push Payment Fraud
The U.K. Payment Systems Regulators (PSR) announced on Tuesday (May 24) that it will need to delay an important deadline for companies to comply with new requirements to fight authorized push payment (APP) fraud. However, the regulator is planning to expand the number of companies covered given the success of the program.
In February 2022, the PSR published a new rule that paved the way for more banks and building societies to adopt Confirmation of Payee (CoP). The deadline to comply with Phase 1 was May 31. However, the regulator just announced that this deadline will be extended to June 30. On the same day, the regulator announced new plans to increase the number of companies offering CoP to 400 by 2024, up from the 33 now.
