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France’s CBDC Test Moves Digital Euro One Step Closer to Reality

France’s CBDC Test Moves Digital Euro One Step Closer to Reality

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France is paving the way for a digital Euro, but how will its CBDC shape up, and what effect will it have on the cryptocurrency industry?

Lately, it seems that most major national banks are toying with the notion of a national digital currency. France is conducting tests of its own now, and it could pave the way for a digital euro. What will France’s experiments involve, and how will they affect the crypto ecosystem? Here’s what is known so far.

According to a document it published on March 30, the Bank of France is on the hunt for a central bank digital currency that can ease interbank settlements. To find one, the institution has called on Europe’s finest, inviting applicants — institutional or otherwise — to explore potential advantages of a CBDC. 

By July 10, the central bank will elect ten CDBC-centric applications, basing the decision on innovative utility. Curiously, the bank isn’t pigeonholing the CBDC to blockchain alone, choosing instead to leave the door open for other technological solutions.

The experiment’s intentions are three-fold. First, to illustrate how a CBDC could effectively complete interbank settlements. Second, to uncover additional advantages of digital currency. And third, to understand the potential impact of one on financial stability.

The bank has painstakingly emphasized that the test is purely experimental and won’t continue in the long run. The project also won’t be used commercially, finding usage within interbank transfers instead, with the broader intent of replacing legacy systems. It will, however, serve as a precedent in a deeper investigation into a digital euro. So, can a CBDC fix the Eurozone’s lagging legacy systems, and what will the wider implications be on the cryptocurrency industry?

Pros and cons of a CBDC

One fundamental aspect of the digital currency venture is utility. There are several classes of CBDC, including wholesale and retail. Each provides its own utility. Retail CBDCs are essentially digital fiat money, where issuance originates from a central bank. A wholesale CBDC — the kind targeted by the Bank of France — would act much the same as reserves held by central banks and primarily facilitates interbank settlements. A hybrid (as the name suggests) combines these two, extending issuance to commercial banks. 

For Martin Nelson, chief operating officer of M10 — a provider of digital money rails for banks — the advantages of a CBDC very much depends on its type. Speaking to Cointelegraph, Nelson pointed out the benefits of a wholesale CBDC over prevailing legacy systems:

“A wholesale CBDC can bring benefits over the incumbent model such as programmability, enablement of cross-border transactions and be a stepping stone to a ‘synthetic CBDC’ (distribution of digital currency to the general public through an intermediary such as a bank or e-money provider).”

While France’s tests center on a wholesale iteration of CBDC, the notion of a forthcoming digital euro is inescapable. According to Hugo Renaudin, CEO and co-founder of French institutional crypto exchange LGO, synthetic CBDCs are the next logical step for the financial system, as “it is extremely important for a central bank to understand where its currency is and who owns it. Today, as it stands, it is almost impossible,” he told Cointelegraph.

Related: Two Versions of Digital Dollar Emerge as Contenders, but Unlikely to Come Soon

Renaudin then referred to a preliminary version of the United States government’s coronavirus stimulus bill — a version that included a proposal for a digital dollar, saying that fiat currency is not scalable:

“The U.S. government is living a logistical nightmare to be able to send checks to millions of Americans as part of their COVID-19 stimulus plan. With programmatic money, such as CBDC, it becomes very straightforward to send money to and collect it from a large amount of people at once.”

However, Renaudin warned that transitioning to digitized fiat isn’t without its pitfalls. A CBDC could impact privacy if implemented without appropriate provisions, allowing governments to snoop on their citizen’s financial affairs at will. Renaudin called the solution a double-edged sword: “They give more control to their issuers who can monitor transactions, balances, debit and credit accounts — potentially at will.”

Is blockchain the answer?

As it promises to rejuvenate the ailing banking system, an omission of blockchain could prove unwise, according to Pascal Gauthier, CEO of hardware wallet manufacturer Ledger. Gauthier also voiced privacy concerns to Cointelegraph, noting that any new system must retain anonymity, and that the blockchain could be a way to facilitate that: 

“There is no benefit if it remains a simple digital currency. Although, if it runs on a public blockchain there will be two main benefits, one for citizens, they will own their private keys so they will be their own bankers, the other for governments who can program the public blockchain to track the money in order to check if it has been sent and used properly, but it must absolutely remain anonymous.”

The Bank of France is not against blockchain, per se, it merely wishes to remain impartial to the types of technology available. However, Alex Baitlin, founder of custodial wallet specialist Trustology, explained to Cointelegraph that while a host of technological stand-ins exist, blockchain remains the best choice:

“If the Banque de France was focused on money transfers exclusively then alternate technology such as hashgraph could be tapped into. But this is not the case, it's specific to interbank settlement which suggests the need for immutability of records, transparency and real-time. Thus, in this case blockchain becomes the better fit here.”

Despite early designs for a CBDC pilot, Sweden’s central bank remained reluctant to implement a blockchain, suggesting it wasn’t battle-hardened enough. That was, until recently. The so-called e-krona — Sveriges Riksbank’s CBDC test — is well underway. The project harnesses distributed ledger technology, which is synonymous with the blockchain, according to the bank.

DLT could well be applied within France’s own CBDC test. However, while marking a positive step toward implementing decentralized-esque technology, many believe DLT pales in comparison to blockchain. “It’s like apples and oranges,” David Walsen, founder of Europe-based trading platform Hedgetrade, told Cointelegraph, adding that, “A CBDC such as the e-krona will have strict permissions and requirements to participate.”

A digital euro and its bearing on Bitcoin 

Plans for a digital euro have been in the works for some months. The French central bank confirmed objectives for a wholesale CBDC back in November 2019. Now, with initiatives underway in Sweden and soon, France, the framework is finally being assembled. According to Nelson, though, a lot more testing will need to take place before a digital euro materializes, and even then, it likely won’t fall into the hands of the public: 

“Experimentation by central banks with CBDCs will accelerate this year and next. The results will be carefully analyzed before a decision is made. A wholesale CBDC is likely to emerge before a version that’s available to the general public.”

But Gauthier suggests it isn’t prudent for the European Central Bank to stay idle for too long. He believes that, in the wake of private sector initiatives such as Facebook’s Libra, traditional finance must act quickly, stating, “Central Banks and traditional finance must adapt to new technologies to remain relevant for consumers.” Gauthier also added that “CBDCs are the Central Bank’s reaction to Libra and more generally to the threat of private crypto-money.” 

Which poses a question to the contrary: How will cryptocurrencies fare once a digital euro is introduced? According to Renaudin, the introduction of a digital euro will usher in a more reliable crypto infrastructure that is currently not connected to any other systems:

“Wallets and on-chain transactions are still clunky, and very few non-crypto businesses have an IT infrastructure that uses these technologies. It’s a different story once they’ve adapted to a digital euro, which naturally increases the ability of individuals and businesses to access Bitcoin and cryptocurrencies.”

For Nelson, however, once a retail or synthetic CBDC enters the scene, Bitcoin (BTC) could lose some of its appeal, while a wholesale CBDC would most likely have no impact on Bitcoin:

“A general purpose, or synthetic CBDC could lead to reduced demand for Bitcoin, but even that is questionable. Bitcoin is currently more of an alternative asset class used primarily by speculators. A digital euro will not compete with that.”

On the contrary, Walsen proposes that while CBDCs could pose some threat to cryptocurrencies, Bitcoin’s inherent attributes of privacy and security will trump any digital fiat. He added that, “Well-established cryptocurrencies do have a jump start and offer more in the way of privacy, security and financial freedom.”

Overall, France’s CBDC tests mark a relatively significant stride forward for traditional finance. However, if a digitalized fiat is to be introduced, central banks need to prioritize fundamental provisions such as privacy — or else those that are conscious of those issues will turn to crypto.

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Economics

New principles for biological fieldwork will build equity for researchers and local communities

LAWRENCE — For hundreds of years, teams of biologists have carried out fieldwork around the globe, often trekking to remote places to collect specimens…

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LAWRENCE — For hundreds of years, teams of biologists have carried out fieldwork around the globe, often trekking to remote places to collect specimens and data about our natural world. Today, such work can demand collaboration between large international teams of biologists, extensive permitting with authorities, interaction with local communities and research plans often led by one or two senior investigators.

Credit: Michael Cuesta

LAWRENCE — For hundreds of years, teams of biologists have carried out fieldwork around the globe, often trekking to remote places to collect specimens and data about our natural world. Today, such work can demand collaboration between large international teams of biologists, extensive permitting with authorities, interaction with local communities and research plans often led by one or two senior investigators.

Too often, these factors can result in power imbalances between researchers and local communities where fieldwork takes place. Moreover, inequities based on race, gender, sexual orientation and seniority can develop within the teams of researchers themselves.

Now, a new paper appearing in the Proceedings of the National Academy of Sciences lays out a set of principles for biological fieldwork designed to lessen inequities between researchers and local populations, as well as internally among research teams themselves. Many “best practices” in the paper are adapted from procedures for permitting and licensing developed over years at the University of Kansas Biodiversity Institute and Natural History Museum.

“When I was invited by colleagues at Berkeley to be part of this conversation, I was really happy to contribute,” said co-author Rafe Brown, curator-in-charge of the Herpetology Division at KU’s Biodiversity Institute. “After more than 30 years of working in the Philippines, I had lots of experience in managing groups of people working together in the field. I’d seen a lot of things work out well, and a lot of things work out so-so, where we needed some improvement in the way we interact, as groups of people, working often in remote and stressful field conditions. I’ve seen some real trainwrecks of group psychology during fieldwork — and things that just struck me as potentially dangerous. I never had any real disasters myself, but I saw some risky and even scary behavior, and heard a lot of stories over the years, in my early career, and in grad school.”

KU’s Biodiversity Institute is seen as a leader in collaborating with local authorities and populations to make sure biological fieldwork is ethical, legal and safe — in part because of its extensive checklists and procedures for permitting and licensing. Supplemental documents to the PNAS paper — a Field Safety Plan Template and a Scientific Permit Checklist – are adapted in part from KU’s procedures.

“I’d like to see these shared widely and adopted by institutions around the world as a foundation for fieldwork planning,” said Lori Schlenker, assistant director of collections and facilities at the Biodiversity Institute. “We’re committed to participating in safe and legal fieldwork and training the next generation of students to be able to lead their own programs and mentor their own students in these practices when they graduate from KU. We’ve been building on our experiences — good and bad — and have developed procedures so that prior to departure, permits are in place and researchers have considered how they will collect, export and import research specimens safely, legally and ethically. This ensures that resources are not expended on specimens that we cannot legally accession into our collections. Most importantly, the safety of all field team members is critical. Applying the experience of our BI researchers, and with guidance from KU, emphasis is placed on communication and transparency as part of the fieldwork planning process.”

Much of this to hone the way KU biologists tackle permitting and interacting with local authorities and communities has taken place in the Philippines, where Biodiversity Institute personnel strive for locally inclusive fieldwork.

“Our 15-year, multi-institutional collaboration with KU has resulted the traditional products and outputs — like students trained, papers published, grants obtained — but it has also profited from many deep discussions and steps taken, to correct the past landscape of exclusively foreigner-led, expeditionary fieldwork,” said co-author Tess Sanguila of Father Saturnino Urios University in the Philippines. “Additionally, here within the country, our own scientific community often only considers and prioritizes the contributions and inputs from the so-called experts in the capital city over those of the researchers from the provinces in the southern Philippines, who are stereotyped as being of inferior expertise. This paper provides a simplified and practical starting point, from which we hope to establish a solution to this whole imbalanced culture, and from which we fundamentally advocate to ‘support local’ for more inclusive and invigorated long-term collaborations of the future.” 

The PNAS paper advocates four main principles for fieldwork to promote “equity, reciprocity, access, benefit-sharing and safety”:

  • Be collaborative: We embrace collaborative science and fieldwork practices with our partners, field teams and the communities with whom we work.
  • Be respectful: We prioritize local sovereignty and long-term benefits for the community, and we invest time and effort in learning about and respecting local history and cultures.
  • Be legal: We commit to obtaining all necessary permits, authorizations, and land permissions, and to following all legal guidelines and requirements.
  • Be safe: We work proactively to promote a safe physical and emotional environment for all members of research teams and local communities with clear guidance and communications.

Lead author Valeria Ramírez Castañeda, doctoral student in integrative biology at the University of California, Berkeley, said her own time conducting biological fieldwork in the Amazon inspired her work on the paper.

“My own personal experience comes from the Global South,” Castañeda said. “I’m Colombian, and my focus was in particular on how we interact with local communities when conducting fieldwork. My research in biology takes place in the Colombian Amazon, where I work with predator-prey interactions between snakes and frogs. The local community — biologists, drivers, field assistants, among others — sustain and inform my work there. However, are we scientists reciprocal when it comes to thinking about benefits and acknowledgments for the community? I’ve been trying to change or at least acknowledge practices that exclude the local communities from research. I was born in the biggest city in Colombia — Bogotá — so I was an uninvited guest in the Amazon territory. I’ve been trying to get to know the community where I work, ask for consent for every procedure, explain my research, collaborate with biologists and field assistants from indigenous and local communities, and participate in community-science projects.”

In addition to working with local populations and authorities, the new paper offers recommendations to alleviate power asymmetries that can plague fieldwork teams internally.

“With all the recent civil unrest in the U.S. and the existing inequities that have been exacerbated by the pandemic, it’s a good time to reevaluate how we do things in our profession because people are listening and reflecting,” said Rebecca Tarvin, assistant professor of integrative biology at the University of California, Berkeley. “Personally, I’ve wanted to think more deeply about field biology for some time. I didn’t receive any formal training on how to do collaborative science involving fieldwork and I think this is largely true for others in field biology. The way people conduct fieldwork thus often depends on the norms and culture of their lab and on the default approaches to doing science. However, doing equitable science takes intentional planning, and many default approaches are not equitable. That’s why we wanted to provide some general guidelines that can help anyone proactively plan more equitable research programs.”

Tarvin added that data show diverse teams can produce more innovative and robust research.

“Having diverse groups doing fieldwork in a way that is fair, open and collaborative with the people living where we work has the further benefit of including everyone in conducting, communicating and benefiting from science,” she said.


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Government

Joe Biden’s Inflation Reduction Act “Secretly” Brought To You By Bill Gates

Joe Biden’s Inflation Reduction Act "Secretly" Brought To You By Bill Gates

The Democrats’ "Inflation Reduction Act" – which according to…

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Joe Biden's Inflation Reduction Act "Secretly" Brought To You By Bill Gates

The Democrats' "Inflation Reduction Act" - which according to the Congressional Budget Office will raise taxes on the middle class to the tune of $20 billion - not to mention unleash an army of IRS agents on working class Americans over the next decade, was made possible by Bill Gates and (in smaller part) Larry Summers, who have been known to hang out together.

Pals hanging out

The bill, of course, was signed yesterday.

In a Tuesday Bloomberg article that reads more like a newsletter for the Gates fan club, the billionaire Microsoft co-founder recalls how earlier this year, as moderate Democratic Senators Joe Manchin and Kyrsten Sinema continued to block the tax-and-spend legislation over concerns that it would raise taxes on the middle class (it will), Gates says he tapped into a relationship with Manchin that he'd been cultivating since at least 2019.

Gates was banking on more than just his trademark optimism about addressing climate change and other seemingly intractable problems that have been his focus since stepping down as Microsoft’s chief executive two decades ago. As he revealed to Bloomberg Green, he has quietly lobbied Manchin and other senators, starting before President Joe Biden had won the White House, in anticipation of a rare moment in which heavy federal spending might be secured for the clean-energy transition.

Those discussions gave him reason to believe the senator from West Virginia would come through for the climate — and he was willing to continue pressing the case himself until the very end. “The last month people felt like, OK, we tried, we're done, it failed,” Gates said. “I believed it was a unique opportunity.” So he tapped into a relationship with Manchin that he’d cultivated for at least three years. “We were able to talk even at a time when he felt people weren’t listening.” -Bloomberg

We know, gag us with a spoon.

Apparently Gates and Manchin's bromance began when the billionaire wooed the West Virgina Senator at a 2019 meal in Seattle, in an effort to garner support for clean-energy policy. Manchin at the time was the senior-most Democrat on the energy committee.

"My dialogue with Joe has been going on for quite a while," said Gates.

After Manchin walked (again) on the bill last December over concerns that it would exacerbate the national debt, inflation, the pandemic, and amid geopolitical uncertainty with Russia, Gates jumped into action. A few weeks later, he met with Manchin and his wife, Gayle Conelly Manchin, at a DC restaurant, where they talked about what West Virginia needed. Manchin understandably wanted to preserve jobs at the center of the US coal industry, while Gates suggested that coal plant workers could simply swap over to nuclear plants - such as those from Gates' TerraPower.

Manchin apparently wasn't convinced, announcing on Feb. 1 that "Build Back Better" (the Inflation Reduction Act's previous iteration) was "dead."

In an effort to convince him otherwise, Democrats pulled together a cadre of economists and other Manchin influencers - including former Treasury Secretary Lawrence Summers, who convinced Manchin that the bill wouldn't raise taxes on the middle class, or add to the deficit.

Collin O’Mara, chief executive officer of the National Wildlife Federation, recruited economists to assuage Manchin’s concerns — including representatives from the University of Chicago and the Wharton School of the University of Pennsylvania. Senator Chris Coons of Delaware brought in a heavyweight: former Treasury Secretary Lawrence Summers, who has spent decades advising Democrats. 

The economists were able to “send this signal that [the bill’s] going to help with the deficit,” O’Mara said. “It’s going to be slightly deflationary and it’s going to spur growth and investment in all these areas.” Through this subtle alchemy, clean-energy investments could be reframed for Manchin as a hedge against future spikes in oil and gas prices and a way to potentially export more energy to Europe. -Bloomberg

Gates also sprang into action again on July 7, when Manchin was spotted at the Sun Valley media conference in Idaho - which Gates also attended.

"We had a talk about what was missing, what needed to be done," Gates said. "And then after that it was a lot of phone calls."

Gates looks back at the new law with satisfaction. He achieved what he set out to do. “I will say that it's one of the happier moments of my climate work,” Gates said. “I have two things that excite me about climate work. One is when policy gets done well, and this is by far the biggest moment like that.” His other pleasure comes from interviewing people at climate and clean-tech startups: “I hear about this amazing new way to make steel, cement and chemicals.” -Bloomberg

"I don’t want to take credit for what went on," says Gates - in the article about how he gets credit for what went on.

Tyler Durden Wed, 08/17/2022 - 10:11

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Economics

Updated: EU’s lending arm grants Polish biotech $22M+ in debt financing to advance pipeline

Many US biotechs have been tightening their pocketbooks in an effort to keep themselves running. But over in Poland, one company is nabbing a debt financing…

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Many US biotechs have been tightening their pocketbooks in an effort to keep themselves running. But over in Poland, one company is nabbing a debt financing to push itself towards more clinical trials, with the help of one of Europe’s largest lenders.

Ryvu Therapeutics put out word early Wednesday that the European Investment Bank, the lending arm of the European Union, is providing the biotech with $22.3 million in debt financing — or €22 million. As part of the debt financing, the European Fund for Strategic Investments is backing it with a “first loss guarantee,” ensuring that the EIB can at least recoup some of its investment if the company’s projects go south, allowing it to invest in projects that could have a higher level of risk.

Teresa Czerwińska

EIB VP Teresa Czerwińska said in a statement that financing projects within R&D are a top priority for the lender, noting, “The EIB’s investment will strengthen Ryvu Therapeutics’ research, development and innovation capacity and competitiveness for the wider social benefit.”

Ryvu will use the financing to continue advancing its pipeline of oncology small molecule candidates through the discovery and preclinical phases and into clinical trials, CEO Pawel Przewiezlikowski said in a statement. The biotech is going after such targets as PRMT5 and WRN in synthetic lethality, STING in an antibody-drug conjugate, STING as a standalone and HPK1 in I/O, according to Ryvu’s website.

The company had reached a partnership with Belgian biotech Galapagos back in 2020, focusing on drug discovery and developing small molecules with inflammation targets. Late last year, Galapagos utilized its exclusive option to license an inflammation program originally discovered by Ryvu, with worldwide rights and no mention as to how much cash Ryvu has gotten or will get from royalties and milestones.

Przewiezlikowski told Endpoints News via email that Ryvu, with around 160 employees, is solely focused on oncology for the time being. On top of the program Ryvu out-licensed to Galapagos, the biotech spun out its inflammasome assets into UK-based NodThera in 2016, where the company remains a shareholder.

The biotech’s clinical pipeline also includes two partnered molecules: RVU120, currently in Phase I for AML/MDS and solid tumors; and SEL24 for AML, which is currently in a Phase II study with new data expected sometime in Q4.

The EIB has invested millions into biotech and drug companies over the years since it was founded back in the 1950s. Some of its investments last year included a $101.7 million loan to BioNTech, and $24 and $25 million financing to German companies Atriva and Immunic to develop medicines for hospitalized Covid-19 patients.

While the average investment from the EIB into the health and life sciences space is approximately $1.4 billion a year, 2020 significantly deviated from the average, where more than $5 billion in investments were signed, likely exacerbated by the Covid-19 pandemic. The EIB also became one of the partners in Gavi’s Covid-19 initiative, which secured $4.8 billion in pledged funds back in April.

Editor’s note: this story has been updated with comment from Ryvu Therapeutics CEO Pawel Przewiezlikowski.

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