Category: Europe

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CBDCs Crypto News Europe

European Central Bank Claims Fixed Supply for its CBDC: 1.5 Trillion Euros

The European Central Bank’s executive board member Fabio Panetta has announced that the ECB will limit the digital euro to a maximum supply of 1.5 trillion euros.

Panetta appeared before the European Parliament’s Committee on Economic and Monetary Affairs to report on the development of a digital euro as the program reaches the one-year mark:

Eurozone Set to Launch CBDC in Four Years

Since the eurozone’s central bank initiated a two-year investigation into a possible digital currency in July 2021, Panetta has said he was optimistic that a central bank digital currency (CBDC) would be ready for launch within four years. Panetta told the committee that should a digital euro be issued, it would be capped at 1.5 trillion euros as a major concern with a CBDC is that consumers might keep all their money in digital format, which would in effect mean depositing their entire savings with the central bank and starving consumer banks of the funds they need to lend to businesses and individuals.

Panetta said in a statement: “Keeping total digital euro holdings between one trillion and one-and-a-half trillion euro would avoid negative effects for the financial system and monetary policy.” He added: “As the population of the euro area is currently around 340 million, this would allow for holdings of around 3,000 to 4,000 digital euro per capita.”

Panetta continued by saying that many Europeans are “not enthusiastic, to put it mildly, about the digital euro”. This, he said, was partly due to the fact that very few people understand what a digital euro is because “it’s complicated”.

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Crypto Exchange Crypto Hardware Wallets Crypto News Crypto Wallets Cryptocurrency Law Europe Regulation

EU Parliament Votes in Favour of KYC for Private Crypto Wallets

European Union lawmakers have voted in favour of controversial proposals that require exchanges to collect personal data from individuals who transact more than EUR 1,000 using unhosted wallets.

Bad News for Exchanges

The proposals were passed, albeit narrowly, and purport to effectively prohibit anonymous crypto transactions:

The underlying justification behind the proposals is that they intend to extend anti-money laundering (AML) requirements that apply to conventional payments over EUR 1,000 to the crypto sector. As Coinbase CEO Brian Armstrong noted, however, the burden imposed on exchanges would be extremely onerous:

Most of the pushback from industry is because non-custodial wallets aren’t necessarily customers, with commentators describing the measures as “anti-innovation and anti-privacy”.

Referring to Chainalysis data showing that less than 0.05 percent of crypto volume was related to crime, hardware wallet provider Ledger argued that the proposals were neither necessary nor proportionate. It further noted that they reduced financial freedom, consumer protection and financial inclusion, and put Europe at a competitive disadvantage relative to other jurisdictions.

Image
Proposals’ unintended consequences. Source: Ledger

While some noted that users would simply resort to decentralised exchanges or send EUR 999 at a time, others had a more humorous perspective:

Turning Up the Regulatory Heat

This year has already shown that European lawmakers are increasingly scrutinising the digital asset sector. A few weeks ago, the EU Parliament finally decided not to ban proof-of-work cryptocurrencies (effectively Bitcoin), after going back and forth on the matter.

The next battle is clearly over unhosted wallets and for now it appears as if the regulators are in the driving seat. Importantly, the laws have not been enacted and still need to go through tripartite meetings between the EU Parliament, European Commission, and European Council.

Despite expectations that little will derail the proposals in question, if there is one thing we know about the crypto sector it’s that it will never go down without a fight.

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Bitcoin Bitcoin Mining Digital Asset Mining Europe Mining

BTC Holders Breathe Sighs of Relief as EU Parliament Votes Against Proof-of-Work Ban

In yet another unexpected twist in the ongoing European cryptocurrency regulation saga, the EU Parliament has officially removed all language banning proof-of-work (POW) cryptocurrencies from the newly passed Markets in Crypto Assets (MiCA) directive. 

EU Goes Back and Forth on POW

The crypto industry was initially concerned about a draft of the MiCA bill that included provisions banning POW cryptocurrencies such as Bitcoin. It then reversed course following a strong backlash, claiming it “wasn’t their intention to create a de facto Bitcoin ban”.  But then things changed, again.

In a classic last-minute insertion of dangerous far-reaching language, reminiscent of last year’s US$1.2 trillion infrastructure bill, provisions banning POW cryptocurrencies were once again inserted into draft bill.

Even though research shows that Bitcoin mining emissions are at “inconsequential levels”, policymakers nonetheless felt it necessary to highlight so-called “unsustainable” crypto mining practices, a clear attempt if ever there was one at appeasing ESG stakeholders.

Crypto lawyer Jake Chervinsky had his doubts about the true intentions of lawmakers and didn’t mince his words:

Nathaniel Whittemore, host of The Breakdown podcast, suggested in his latest episode that environmental concerns are likely more about Bitcoin using energy at all:

My point is that fundamentally, the key thing that any environmental consideration of Bitcoin or proof-of-work is going to rest on, is not whether other things consume more energy, it’s whether the energy that Bitcoin does consume in the first place, is worth it.

Nathaniel Whittemore, host of The Breakdown podcast

POW Provisions Rejected … For Now

After the surprise inclusion of the POW provisions, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) rejected versions of the legislative package that contained a “de facto” ban on POW cryptocurrency mining by a count of 32 to 23 – with six individuals abstaining.

While commentators breathed a sigh of relief, Patrick Hansen of Unstoppable DeFi was quick to pour cold water on the notion that the battle was over:

Any chances left for the POW-ban? The groups that lost the vote have one last option. They could veto a fast-track procedure of MiCA through the trilogues and bring the discussion to the plenary of the Parliament. They need 1/10 of the votes of the EP to do so, which they have. That would bring the discussion around POW into the high-level policy arena. As we can’t predict how that would play out, it should be prevented. Even if it doesn’t change the vote on POW, it would unnecessarily delay the regulation for at least a couple of months. And even outside of this MiCA regulation, the discussion around POW-regulation is far from over. It will come back in the context of the sustainability taxonomy or in the upcoming data centre regulation.

Patrick Hansen, head of strategy & business development, Unstoppable DeFi

Hansen concluded by saying there is still “loads of work left in the month and years ahead, but today is a big political success for crypto in the EU”.

Bitcoin holders, miners and other POW cryptocurrencies might have won the battle, but clearly the war is far from over.

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Bitcoin Crypto News Europe Hackers Ransomware

European Electronics Giant ‘MediaMarkt’ Victims of $50 Million Bitcoin Ransomware Attack

German multinational electronics chain MediaMarkt has suffered a ransomware attack disrupting the organisation’s IT systems globally, rendering all in-store computers inaccessible to employees. The business has been brought to a standstill unless it pays a US$50 million bitcoin ransom.

Multimillion-Dollar Ransom Demand

MediaMarkt suffered a Hive ransomware attack on November 7, causing network outages in its IT infrastructure across all branches in the Netherlands and Germany, with the attackers demanding a multimillion-dollar ransom in bitcoin (BTC). The attack has allegedly encrypted and blocked various key services of the retailer, including its ability to accept credit cards and accept returns in some stores. Online sales are reportedly unaffected. 

According to a report from Dutch news channel RTL, on every hacked computer there is a file containing the message: “Your network has been hacked, and all data has been encrypted. To regain access to all data, you must purchase our decryption software”.

MediaMarkt (Belgium) spokeswoman Janick De Saedeleer told local news channels: “We are investigating everything at the moment; I can only confirm that this is an international attack.”

The company immediately informed the relevant authorities and is working at full speed to identify the affected systems and repair any damage caused as quickly as possible.

MediaMarkt statement

Up to 3,100 Servers Possibly Affected

With over 1,000 stores across Europe and reported revenues of nearly US$25 billion per year, MediaMarkt is Europe’s largest and most profitable electronics retailer, making it a big red target for cyber criminals. Screenshots posted from Twitter claim that 3,100 servers were compromised, though this information is yet to be verified.

Copy of the ransom not found on MediaMarkt computers

Initially, the ransom demand was US$240 million, according to tech website Bleeping Computer, but that amount dropped almost immediately when MediaMarkt began negotiating.

Hive Hacker Group Behind the Attacks

While there are many groups that have active hacking campaigns, the MediaMarkt’s attackers are known as Hive. The group, which has previously hacked hospital computer systems, among others, handles its business quite professionally. It even has a sort of “customer service” division where victims can chat with the hackers to negotiate the ransom and get a few hostage files back as proof. Those who fail to pay in time will find that their information will be up for grabs on the group’s website. By leaking this data, the hackers put pressure on their victims.

Alongside the rise in crypto prices this year, ransomware attacks have also increased in frequency and levels of damage. According to blockchain data company Chainalysis, by May the tally of stolen crypto from ransomware attacks had already reached US$81 million.

In July, Australian software provider Kaseya was hit by a ransomware attack affecting various Aussie retailers. Members of the REvil group were found to be responsible and police seized more than US$6 million in stolen funds.

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Blockchain Europe Google United Kingdom

Decentralised Search Engine Becomes Default Option for EU Android Devices

Decentralised search engine Presearch (PRE) has officially been added to Google’s default browser choice screen for all UK and European Android devices.

Fair Play Among Browsers

After receiving a €4.24 billion (A$6.8bn) fine from the European Commission in 2018 for using the Android operating system to solidify its place as the most used search engine in the world, Google stopped requiring competing search engines to pay in order to get on the default settings page.

In 2019, the agreed changes were that the five most popular and eligible search engines (including Google) in each EU country would be displayed in random order at the top of the Android choice screen, conforming to metrics from StatCounter.

Nearly 70 percent of smartphone owners in Europe use the Android operating system, which means there is strong potential for the search engine to grow its user base.

With potentially hundreds of millions of users just a click away on the search choice screen, this is one of the biggest wins for any project within the crypto space.

Colin Pape, founder, Presearch

What is Presearch? 

Presearch operates its own advertising platform that uses Keyword Staking, which allows advertisers to stake PRE tokens to a specific word or term. Whichever advertiser stakes the most tokens to a given keyword has its ad show up when someone searches that term.

With more than 2.3 million registered users, Presearch is one of the world’s top 10 most-trafficked blockchain websites and one of the fastest-growing alternatives for private, unbiased searches. Competing with Brave, Presearch aims to join the decentralised service landscape and provide users with a privacy-centric search engine.

Presearch currently processes more than 1 million searches per day and the company says daily searches have increased more than 300 percent since January 2021. The searches are processed by Presearch node operators that earn PRE for their efforts on the Ethereum blockchain.

PRE Token Up 80% Amid Announcement  

PRE tokens are currently trading at A$0.20, having shot up just over 100 percent in the past seven days. The project has a total market capitalisation of nearly US$74 million.

Presearch(PRE) Price: Coinmarketcap

With Android running on about four-fifths of the world’s smartphones including hundreds of millions in Europe, we see this as a huge win in taking decentralized services and blockchain mainstream and driving mass adoption.

Colin Pape, founder, Presearch
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Banking CBDCs Crypto News Europe

European Central Bank Launches Digital Euro Project, Wants It to be More “Sustainable” Than Bitcoin

The European Central Bank has announced it will explore the possible creation of a digital euro, launching a two-year project to work on the design.

The project’s launch follows extensive groundwork from the bank including a digital euro report, public consultation, and experiments to assess the technological feasibility of a digital euro.

These experiments found the proposed digital euro core infrastructure would be environmentally friendly compared to the energy consumption of cryptos like Bitcoin. 

ECB has indicated a digital euro would complement cash rather than replace it, being a direct claim on the central bank that would reduce risks associated with digital payments and enable purchases across all EU countries. 

ECB President Christine Lagarde said: “Our work aims to ensure that in the digital age citizens and firms continue to have access to the safest form of money, central bank money.”

Potential Digital Euro Still Years Away

While the goal of the digital euro project is to be prepared for a digital currency, the ECB says the decision about whether or not to develop a digital euro would come at a later stage – and the development work could take an additional three years. 

ECB board member and chair of the high-level task force on a digital euro, Fabio Panetta, said the cautious approach was key to balancing progress with monetary and financial stability.

It [the project] will involve focus groups, interaction with financial intermediaries, prototyping and conceptual work. We will engage with all stakeholders. And we will continue to interact closely with other European institutions to define the necessary legislative framework.

Fabio Panetta, ECB

“Money and payments permeate our everyday lives and underpin the economy. Any changes stemming from technological innovation, if not properly designed, can become a source of disruption for our financial systems, economies and societies,” Panetta added.

How Advanced Are Major Nations with their Digital Currencies?  

A number of jurisdictions are running their own experiments in readiness for the adoption of digital versions of national currencies.

A digital dollar project being run by researchers from the Federal Reserve Bank of Boston and MIT already has at least two prototype platforms that allow users to store and make transactions using the currency. 

In April 2021, both the UK and Japan started exploring a central bank digital currency (CBDC), while China recently expanded on its initial CBDC work to trial paying some workers’ salaries in digital yuan.

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Blockchain Crypto News Europe NFTs

VeChain Blockchain Debuts in San Marino for NFT-Based Digital Vaccination Passports

The Republic of San Marino will issue NFT-based digital certificates to enable its citizens to prove their vaccination history and travel more freely across Europe, in partnership with the public blockchain platform VeChain.

The ‘vaccination passport’ will be provided, by request, to anyone vaccinated in the small, landlocked enclave – located in central Italy – to enable verification of green passes outside the European Union.

The passport will hold data about vaccination against SARS-CoV2 (the precursor of COVID-19), past infection or a negative test result.

VeChain’s passport, which it describes as a ‘Digital Covid Certificate’, contains two QR codes. The first code gives access to a certificate that meets EU standards so member states can instantly verify a person’s vaccination status, while scanning the second code opens a certificate that’s verifiable by anyone.

The solution is enabled by linking to a Non-Fungible Token (NFT): a unique and non-repeatable certificate of digital authenticity guaranteeing immutability and accessibility by being registered on VeChainThor public blockchain.

Blockchain Could Be Key to COVID-19 Recovery

Immutable records of vaccination history, enabled by blockchain solutions, could be key to pandemic recovery efforts.

Darknet markets are already openly selling fraudulent certifications of vaccination. 

If countries want to validate uptake or tie the vaccination to incentive payments, which has been flagged in Australia, medical records stored on a blockchain could streamline the process.

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Crypto News Cryptocurrency Law Europe Investing

Norwegian Government Issues Warning on Cryptocurrencies, Calls For Regulation

Opera building in Oslo
Opera building in Oslo https://unsplash.com/photos/3VCrw7nHH4A

An official statement by Finanstilsynet – the Norwegian entity in charge of financial regulation – has warned consumers to be wary of cryptocurrency investments.

Despite acknowledging the fact that many institutional investors have shown a marked interest in cryptocurrency, Finanstilsynet stated that unlike securities, bonds and other investments, cryptocurrencies are not well regulated within Europe.

Although Norway is not a part of the EU, cooperation between the EU and Norway is very close – and the statement pointed to the EU’s proposed legislation for cryptocurrency that should start providing a general framework for crypto regulation within the EU.

Until such regulations are in place, anyone considering trading in cryptocurrency should think carefully and understand the significant risk that such investments entail. Consumers who want to try this with open eyes should not invest more than they can afford to lose.

Finanstilsynet statement

It’s worth noting that the proposed legislation will not be adopted wholesale, as each EU country controls its own legislative system.

“Certifications” Can Be Misleading

The post also states that many crypto-related businesses in Norway feature a “seal of approval” from Finanstilsynet. However, Finanstilsynet clarified that these businesses are not exactly approved by it.

All businesses functioning in Norway, crypto or not, are required to submit information to Finanstilsynet in order to comply with anti-money laundering (AML) regulations. However, this does not mean that the businesses in question are actually endorsed by Finanstilsynet – only that they comply with rules and regulations already set in place.

The statement also notes there are a number of disreputable sites that are nothing but scams – and that although the Norwegian government is doing its best to get these websites shut down, caution is highly advised.

Overall, the view of Norwegian regulatory bodies on cryptocurrencies is not negative – instead, it stresses the need for regulation and consumer protection similar to those drawn up for other forms of investment.

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Bitcoin Crypto News Cryptocurrency Tax Europe Investing

Bitcoin Trading Tax In Hungary Drops 50% In 2022 COVID Program

Hungary has had a year rougher than most due to the ongoing pandemic. Looking for ways to attract capital in an effort to get back on their feet, they’ve decided to slash taxes on crypto by half.

While Australia is looking at targetting crypto investors, Hungary is taking the opposite approach, by reducing its crypto taxes.

Crypto Taxes Down To 15% in Hungary

In a video posted on Facebook, Hungarian Finance minister Mihály Varga announced that the taxes on capital gains made through cryptocurrencies would be cut from 30.5% to a mere 15%.

Currently, cryptocurrencies are taxed as “other income” in Hungary, as regulations around Bitcoin and other cryptos are less developed than in other EU states.

However, this tax cut would make Hungary one of the most attractive destinations in the EU for crypto investors, alongside countries such as Germany, whose legislation rewards you for HODLing – if tokens are held for more than a year, cryptocurrency is no longer subject to taxation.

Crypto Tax Rates by Country Comparison

Here’s how Hungarian crypto taxes will measure up to other countries:

AustraliaSubject to CGT rates – up to 47%
USASubject to Property Tax – can be up to 37% in the first year
New ZealandSubject to rates for individuals and businesses
Germany0% if held for over a year – 0 tax if transaction is worth less than 600 EUR and tokens were held for less than a year
Hungary30.5% currently, soon to be reduced to 15%
Italy26%, provided profit is over 51,645.69 EUR for 7 days in a row
Spain19% to 23%
Belgium33%
Denmark55%
Israel30%
UKSubject to UK CGT – Income tax may also apply if trades are done frequently
Argentina15%
France33.33%, to be reduced to 25% in 2022
NetherlandsSubject to progressive income tax
Crypto Tax Rates Per Country

While Hungary may not be as far on the road to crypto adoption as states like Estonia, the country is taking important steps toward becoming crypto-friendly, which should attract fintechs and investors from around the globe.

If you’re in Australia and need some help with your Tax then check out the following guides:

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Bitcoin Cryptocurrencies Europe

Data Shows Ukrainian Officials Are Well-Stocked On Crypto, Owning a Massive 46,351 BTC

According to a graph of the cryptocurrencies owned by civil servants, 652 officials in the Ukrainian government declared owning 46,351 Bitcoin – among other cryptocurrencies such as XLM, ETH, Monero and ADA. The total value would be around $2.7 Billion USD.

To Declare Or Not To Declare, That Is The Question

In Ukraine, civil servants must declare all property that they own. However, the legislation regarding cryptocurrencies in Ukraine – a country far ahead of many others when it comes to crypto adoption – is still in its incipient stages, and has not been voted on by Parliament yet. Meanwhile, Dinamo Kiev, one of the most popular football teams in Ukraine, has also been developing its own cryptocurrency.

As a result, public servants are not yet obliged to declare their crypto holdings. Nevertheless, 652 of them chose to declare their holdings – sharing 46,351 BTC between themselves.

Taking a Closer Look At Who’s HODLing

Among those who chose to declare their holdings, the biggest whale is Vyacheslav Mishalov, a member of the Dnipro city council. He accounts for over a third of the total BTC holdings reported, owning a total of 18,000 BTC.  Other noteworthy BTC holders are the first secretary of Ukraine’s embassy in Vietnam – Petro Lenski – with around 6,528 BTC, and Alexander Urbanski – the deputy chairman of the Odesa regional council – who holds a considerable sum of 5,328 BTC.

Although not a Bitcoin HODLer, Rostislav Solod is another public servant in the Kramatorsk region of Kiev – who, besides managing to get into politics and administration at 19, is also a multi-millionaire in Monero. Having bought in when the cryptocurrency was see-sawing between 30 and 50 cents, that’s quite a profit.

According to Chainalysis, Ukraine, Russia and Venezuela are the countries where cryptocurrency is the most widespread – and with people in power who may bring up crypto in a legislative meeting from a more informed position than those who see investing in cryptocurrencies as a new way to attract other investors, the trend may keep going for a while.