In today’s top news in digital-first banking, European Central Bank (ECB) President Christine Lagarde cautioned that stablecoins could be a risk to monetary sovereignty, while Velo Labs is working with Visa and Lightnet on lending in Asia. Plus, the Central Bank of Iceland (CBI) is debuting a new instant payments infrastructure.
ECB President Warns Stablecoins Could ‘Threaten’ Monetary Sovereignty
ECB President Christine Lagarde wrote in an editorial that she believes stablecoins could present a risk to “financial stability and monetary sovereignty.” The official noted that the coins could help with new innovations in payments, but are vulnerable to volatility. “For instance, if the issuer cannot guarantee a fixed value or if they are perceived as being incapable of absorbing losses, a run could occur,” Lagarde said. “Additionally, using stablecoins as a store of value could trigger a large shift of bank deposits to stablecoins, which may have an impact on banks’ operations and the transmission of monetary policy.”
Velo Labs Teams With Visa, Lightnet on MSME Lending in Asia
Velo Labs has unveiled a joint effort with Lightnet Group and Visa to develop payment offerings aimed at serving the Asian micro, small and medium enterprise (MSME) lending market. The tie-up seeks to allow those who have poor (or no) credit histories to attain a line of credit by using digital assets as collateral.
Iceland Central Bank Debuts Instant Payments
The Central Bank of Iceland (CBI) is introducing a new instant payment system in conjunction with the European company SIA, which specializes in high-tech payment offerings and systems. The central bank handles all of Iceland’s interbank payments, handling as many as one million payments daily with peaks of 160,000 per hour.
IMF: Slow Economic Growth, Continuing COVID Outbreaks Could Impact EU’s Public, Private Sectors
The International Monetary Fund (IMF) said that a second wave of COVID-19 is holding back an economic rally in the eurozone and that further, leading to partial or total lockdowns in a number of eurozone economies, and that more funding could be needed. “Rising infections and re-imposed lockdowns have damaged confidence and lowered mobility,” the statement noted.
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