According to a report from Reuters, the world’s largest payment processor companies, Visa and Mastercard, are pushing back the launch of products and services related to crypto, until market conditions and the regulatory environment improve. Visa and Mastercard already have a card issued in partnership with the cryptocurrency exchange Binance, and it offers a fiat-to-cryptocurrency gateway for Binance users.
Anyhow, companies shared concerns about the future of cryptocurrency regulation in a midst of the recent collapse of large players in the crypto industry, such as the FTX. A hard year for crypto companies, pushed Visa and MasterCard to delay the proposed partnerships and decide the way forward after a clearer regulation perspective is established.
At the outskirts of the G20 summit in India, the International Monetary Fund Managing Director, Ms Kristalina Georgieva answered the questions from media around the cryptoassets and digital currencies. In her words, the IMF is very much in favor of regulating the world of crypto and digital money. The IMF, alongside the Bank for International Settlements and the G20s Financial Stability Board (FSB) believes this is a top-priority in the forthcoming period.
She pointed out the difference between legal tenders (national currencies) which are backed by countries that issue them, and the ‘publicly issued cryptoassets and stablecoins calling them ‘just a speculative asset’. If such assets start to pose a threat to the consumers and/or financial stability for countries we should have a mechanism to ban crytpoassets altogether. We have requests from our members not to rule out the mechanism for the total ban. If there are strong consumer protection laws set in place, we will not need a ban. The ban of cryptocurrencies is indeed a tool of last resort, she added in her interview.
In the recent announcement from the Ministry of technology and science of Zambia Mr Felix Mutati, the central financial institutions in Zambia will soon introduce legislation that would regulate the cryptoassests, and in particular Central Bank Digital Currency (CBDC).
The Zambian Minister for technology and science, pointed out in the statement that: ‘there is a need for a policy framework that supports this revolutionary technology.’
In his words, Zambia is seeking the opportunity to embrace this innovative finance technology and will use the regulatory framework ‘as part of deliberate measures to achieve an inclusive digital economy for Zambia’. ‘Cryptocurrency will be a driver for financial inclusion and a change maker for Zambia’s economy’ he added.
Nigeria is the first African country that introduced the digital version of its national currency. The e-Naira currency has been in use for more than a year now, but still lacks mass adoption. In a country of 200 million people, only 0.5% is using e-Naira on a daily basis. The Nigerian government is already using some of the programmability features of digital money, and it’s looking now to enhance them. According to reports from Bloomberg, the Nigerian government is seeking help from the US private tech companies to improve technology behind the virtual currency. Final idea is that at the end of this process, the Central bank of Nigeria achieves full custody and know-how on the technology needed to run a virtual currency environment.
The Nigerian government confirmed that they are looking at: ‘developing additional features and enhancements.”
Titled ‘Shaping the future with Africa’, the strategy notes that Germany’s cooperation with Africa will be based on respect and reciprocity, and anchored into Africa’s priorities and initiatives. Moreover, ‘the BMZ wants to engage in a dialogue with Africa rather than about Africa. It advocates for the voices of African states and the AU to be heard appropriately within multilateral fora.’
Digital transformation features among the focus areas for development cooperation (as part of a broader cluster titled ’employment, fair trade, migration and digital transformation’). First and foremost, Germany intends to contribute to the growth of digital economies across Africa by providing support in areas such as (a) enhancing relevant economic and political frameworks; (b) creating digital markets; (c) enabling secure, universal internet access and bridging digital divides; (d) fostering legal standards and data privacy regulations; (d) stimulating the creation of jobs in the ICT sector. Mobilising investments in digital infrastructures and supporting the implementation of the African Common Free Trade Area are also envisioned.
But supporting digital transformation across Africa relates to more than the digital economy. BMZ will also be directing its development cooperation towards supporting (a) enhancing women’s economic participation, including through providing training for women with a special focus on digital expertise; (b) the digitalisation of healthcare; and (c) the digitalisation of the public sector and the use of digital technology to strengthen political participation.
The US government has launched a Digital Transformation with Africa (DTA) initiative dedicated to ‘expand[ing] digital access and literacy and strengthen[ing] digital enabling environments across the continent’. The USA plans to dedicate over US$350 million to this initiative, which is expected to support the implementation of both the African Union’s Digital Transformation Strategy and the US Strategy Towards Sub-Saharan Africa. DTA’s objectives revolve around three pillars:
Digital economy and infrastructure: (a) expanding access to an open, interoperable, reliable, and secure internet; (b) expanding access to key enabling digital technologies, platforms, and services and scale the African technology and innovation ecosystem; (c) facilitating investment, trade, and partnerships in Africa’s digital economy.
Human capital development: (a) facilitating inclusive access to digital skills and literacy, particularly for youth and women; (b) fostering inclusive participation in the digital economy; (c) strengthening the capacity of public sector employees to deliver digital services.
Digital enabling environment: (a) strengthening the capacities of authorities and regulators to develop, implement, and enforce sound policies and regulations; (b) supporting policies and regulations that promote competition, innovation, and investment; (c) promoting governance that strengthens and sustains an open, interoperable, reliable, and secure digital ecosystem.
The WTO process will start with requests for consultations. However, any resolution is not likely as the WTO’s arbitration body has been dysfunctional due to the US blocking the appointment of new judges. The WTO’s arbitration mechanisms are not likely to be de-blocked.
Thus, China’s move has more of a symbolic relevance in the ongoing ‘chip war’ between the two countries.
The third ministerial meeting of the EU-US Trade and Technology Council (TTC) was held on 5 December 2022 in Washington, DC, USA. During the meeting, the two parties:
Reiterated the importance of cooperating on trust and security in the ICT ecosystem and noted that the TTC Working Group on ICTS security and competitiveness plans to discuss transatlantic subsea cables’ connectivity and security, including alternative routes, such as the transatlantic route to connect Europe, North America and Asia.
Announced plans to launch a pilot project to assess the use of privacy-enhancing technologies and synthetic data in health and medicine.
Announced plans to establish an expert task force to strengthen research and development cooperation on quantum information science, develop common frameworks for assessing technology readiness, discuss intellectual property, and export control-related issues as appropriate, and work together to advance international standards.
Announced progress on increasing standards cooperation, for instance through the Strategic Standards Information mechanism meant to enable the EU and the USA to share information about international standardisation activities and react to common strategic issues.
Announced that the US Department of Commerce and the European Commission are entering into an administrative arrangement to implement an early warning mechanism to address and mitigate semiconductor supply chain disruptions in a cooperative way.
Stressed the importance of eliminating the use of arbitrary and unlawful surveillance to target human rights defenders, and expressed concerns over government-imposed internet shutdowns.
Announced plans to enhance transatlantic trade, for instance through developing joint best practices for the use of digital tools to simplify or reduce the cost of commercial actors’ interactions with the governments in relation to trade-related policy, legal requirements, or regulatory requirements.
Announced the launch of a Talent for Growth Task Force to facilitate exchanges of experiences on training and capacity building and serve as a catalyst for innovative skills policies.
On 30 November 2022, the UK Competition and Market Authority (CMA) announced an investigation of Emma Sleep GmbH regarding online sales practices based on ‘urgency’ claims, potentially breaching UK consumer law.
The CMA will investigate if Emma Sleep used countdown timers and claims about time limits, implying a deadline for a discounted price and thereby harming consumers. The announcement of the investigation endorses the consumer protection programme based on Online Choice Architecture (OCA). The investigation is at an initial stage, and CMA will engage with Emma Sleep to gather additional evidence.
On 16 November 2022, the Digital Services Act (DSA) came into force. The DSA applies to digital services connecting consumers to goods, services, or content. Online platforms will have until 17 February 2023 to report the number of active end users.
The European Commission suggests all online platforms notify it regarding these numbers. Then, the Commission will determine if the platform is a large online platform or a search engine. Following this determination, the platform will have four months to comply with the DSA. EU members will have until 17 February 2024 to accredit their Digital Services Coordinators.
STAY INFORMED, STAY AHEAD
