Russia’s central bank has advised businesses to adopt ‘multiple choice solutions,’ including cryptocurrencies and other digital assets, to manage payments with foreign partners amidst Western sanctions related to Ukraine conflict. The sanctions have severely impacted Russia’s trade with non-sanctioning countries like China, India, the UAE, and Turkey. Key financial institutions, such as the Moscow Stock Exchange and Russia’s SWIFT alternative, have been targeted, exacerbating the challenges for the Russian economy.
Elvira Nabiullina, the central bank governor, highlighted at a financial conference in St Petersburg that the main economic hurdle is the disruption in payment systems. She noted that new financial technologies offer unprecedented opportunities, prompting the central bank to relax its stance on cryptocurrencies for international payments. Businesses have become innovative and discreet in finding solutions, often not disclosing their methods even to the authorities.
Nabiullina also discussed ongoing efforts to establish a new global payment system independent of Western institutions, noting that countries like Russia and its BRICS partners are feeling increasingly vulnerable relying on a single international payment framework. The proposed BRICS Bridge payments system aims to integrate the financial systems of member nations, though progress has been slow and complex.
Adding to the discussion, Andrei Kostin, head of Russia’s second-largest lender VTB, emphasised the sensitivity of international payment mechanisms. He suggested that such information should be classified as a state secret to prevent quick countermeasures from Western entities, implying that Western diplomats closely monitor Russian financial strategies.
The EU plans to impose customs duties on inexpensive goods purchased from online Chinese retailers such as Temu, Shein, and AliExpress. Under EU regulations, items bought online from non-EU countries are exempt from customs duties if their value is under €150. However, the European Commission is considering eliminating this threshold due to the overwhelming volume of e-commerce, with two billion parcels valued under €150 arriving in the EU from outside countries in 2023 alone.
Initially part of a broader customs overhaul introduced in May 2023, the proposed reform may now be accelerated to address the influx of low-cost imports. Critics, particularly in the United States, argue that companies like Shein and Temu exploit tax exemptions to offer products at significantly low prices, such as dresses for $8 and smartwatches for $25, undercutting local competitors.
Why does it matter?
Germany is one of the EU countries that supports an overhaul of the EU import taxes that could remove the duty-free exemption for parcels under €150. Germany’s leading retail association, Handelsverband Deutschland (HDE), has urged the government to act, claiming the exemption has caused a surge in small parcels from online platforms entering the EU. However, not everyone agrees. Ecommerce Europe, representing companies like Amazon and eBay, cautions that removing the duty-free limit could heighten trade tensions and provoke retaliatory actions from key partners such as the US.
According to Sabine Keller-Busse, head of the Swiss bank’s domestic business, UBS is experiencing a significant shift in AI-driven client interactions. She compared this change to patients visiting doctors with pre-formed ideas about their ailments, noting that clients now use AI to generate proposals for the bank.
Speaking at the Point Zero Forum in Zurich, Keller-Busse highlighted the impact of tools like ChatGPT in making more data available, emphasising that UBS must adapt to this new client behaviour.
The bank has been integrating AI into its services and products, launching a pilot programme last year for instant credit aimed at small and mid-sized businesses with urgent liquidity needs. However, this service allows the process to bypass credit officers, expediting the approval for standard credit products. Keller-Busse described this as the beginning of AI’s transformative potential in the banking industry.
As AI continues to evolve, UBS is keenly aware of its growing role in shaping client interactions and service delivery. The bank’s early adoption of AI-driven solutions demonstrates its commitment to leveraging technology to meet its clients’ changing needs, promising future innovations.
Meta has announced a significant update regarding using AI labels across its platforms, replacing the ‘Made with AI’ tag with ‘AI info’. This change comes after widespread complaints about the incorrect tagging of photos. For instance, a historical photograph captured on film four decades ago was mistakenly labelled AI-generated when uploaded with basic editing tools like Adobe’s cropping feature.
Kate McLaughlin, a spokesperson for Meta, emphasised that the company is continuously refining its AI products and collaborating closely with industry partners on AI labelling standards. The new ‘AI info’ label aims to clarify that content may have been modified with AI tools rather than solely created by AI.
The issue primarily stems from how metadata tools like Adobe Photoshop apply information to images, which platforms interpret. Following the expansion of its AI content labelling policies, daily photos shared on Meta’s platforms, such as Instagram and Facebook, were erroneously tagged as ‘Made with AI’.
Initially, the updated labelling will roll out on mobile apps before extending to web platforms. Clicking on the ‘AI info’ tag will display a message similar to the previous label, explaining why it was applied and acknowledging the use of AI-powered editing tools like Generative Fill. Despite advancements in metadata tagging technology like C2PA, distinguishing between AI-generated and authentic images remains a work in progress.
Despite a significant upswing in Ethereum’s price today, an ICO whale has moved a large amount of its holdings to a centralised exchange. Specifically, 7,000 ETH, valued at $24.28 million, were transferred to the Kraken exchange after 209 days of dormancy. The move has raised concerns among Ethereum investors, especially as it comes amid substantial weekly outflows.
Ethereum has seen the largest outflows since August 2022, with $60.7 million in weekly outflows reported by CoinShares. Over the past two weeks, the total outflows amass $119 million, making Ethereum the worst-performing asset in year-to-date net flows. The year-to-date outflows amount to $25 million, further exacerbating investor worries about the asset’s future performance.
Additionally, the US SEC’s recent postponement of the spot ETH ETF launch process has added to Ethereum’s uncertainty. The SEC’s decision to return the S-1 amendment forms for refiling has fuelled speculation about Ethereum’s future in the market.
Despite these concerns, Ethereum’s price has surged today, reflecting a broader positive movement in the crypto market. However, the ongoing outflows and regulatory delays continue to cast a shadow over the asset’s prospects.
Microsoft is restructuring its retail strategy in mainland China, consolidating its retail channels amid reports of closing its network of authorised physical retailers. The tech giant did not confirm the closures or specify the number of stores affected but emphasised the need to adapt to changing customer needs.
Microsoft assured its products would remain available in China through retail partners and its website despite not operating physical stores directly in the region. However, the company did not detail which partners would continue to stock its products.
The change of strategy reflects Microsoft’s ongoing efforts to optimise its retail strategy in one of the world’s largest markets, ensuring accessibility and customer satisfaction through diverse channels, despite diplomatic and political challenges and restrictions.
Amazon has recently hired the co-founders and several team members from AI startup Adept in a strategic move to bolster its AI capabilities. Adept’s CEO David Luan and other key employees have joined Amazon. At the same time, the startup will continue to operate independently, with Amazon paying a licensing fee to use some of its technology to automate business functions.
The recruitment is similar to Microsoft’s earlier hiring of Inflection AI’s team, which has drawn regulatory scrutiny. Adept, valued at over $1 billion, has already named a new CEO. Amazon’s recruitment of Adept’s team signals its ambition to advance AI agent tools, an area of focus for major tech labs. The company is also working to update its Alexa voice assistant with generative AI for more complex and responsive interactions.
At Amazon, Luan and others will report to Rohit Prasad, who leads the company’s artificial general intelligence efforts. Previously head of Alexa, Prasad has integrated researchers across Amazon to enhance AI model training. He stated that these new hires will significantly contribute to Amazon’s pursuit of achieving AGI.
The Bahamas, the first country to issue a central bank digital currency (CBDC) with its ‘Sand Dollar’ in 2020, is now preparing regulations to mandate commercial banks to provide access to the digital currency to boost its adoption. Central Bank Governor John Rolle emphasised the need for commercial banks to distribute the Sand Dollar, as current uptake remains limited. He indicated that regulations should be in place within two years to ensure all commercial banks offer their clients access to the CBDC.
Despite being a pioneer, the Sand Dollar accounts for less than 1% of the Bahamas’ currency in circulation, with a significant drop in wallet top-ups from $49.8 million to $12 million in a year. The low adoption mirrors the experiences of countries like Nigeria and Jamaica, which have also seen minimal usage of their CBDCs. Critics argue that CBDCs still need to offer clear advantages over existing payment methods and raise concerns about potential government surveillance.
Rolle believes that mandating banks to integrate the Sand Dollar into their systems will enhance its usage but recognises that the real challenge is encouraging more businesses to accept it as a payment method. Unlike India, which offers financial incentives for using its e-rupee, or Israel, which is considering interest rates on CBDC wallets, the Bahamas does not plan to offer such incentives for the Sand Dollar.
Sony Group has ventured into the cryptocurrency trading platform sector by acquiring Amber Japan. That move signifies a strategic expansion for Sony, a conglomerate with a market value surpassing $100 billion and a diverse portfolio that includes gaming, music, and cameras.
Amber Japan was established earlier this year when Singapore-based market maker Amber Group acquired the regulated Japanese cryptocurrency trading platform DeCurret. The rebranding to Amber Japan followed this acquisition, marking Amber Group’s significant footprint in the Japanese market.
In February 2022, Amber Group secured $200 million in a financing round, reaching a valuation of $3 billion. That funding round saw investments from prominent firms such as Temasek, Sequoia China, Pantera Capital, and Tiger Global Management, highlighting strong investor confidence in the company’s growth and potential.
EU antitrust regulators scrutinise Microsoft’s partnership with OpenAI and Google’s AI deal with Samsung due to concerns over exclusivity clauses. Competition chief Margrethe Vestager plans to gather more third-party views. This development comes amid global unease about Big Tech’s dominance in new technologies.
After sending questionnaires to tech firms regarding their AI partnerships, Vestager now seeks additional information about Microsoft’s $13 billion investment in OpenAI’s for-profit subsidiary, which would result in a 49% stake, to determine if it harms competitors.
📢 For now, we conclude that @Microsoft has not acquired control of @OpenAI under 🇪🇺 Merger Regulation.
We will keep monitoring the relationships between all key players in the AI sector, incl. Microsoft & OpenAI.
While Microsoft’s deal isn’t subject to EU merger rules, Vestager also investigates if Big Tech is blocking smaller AI developers from accessing users and businesses. Similar concerns apply to Google’s agreement to pre-install its Gemini Nano model on Samsung devices.
Vestager also examines ‘acqui-hires,’ where companies acquire others primarily for their talent, such as Microsoft’s $650-million acquisition of Inflection, to ensure these practices don’t bypass merger control rules and lead to market concentration.
Why does it matter?
Reuters reported in April that the EU regulators were building a case that could lead to an antitrust investigation into Microsoft’s $13 billion investment in OpenAI. Partnerships involving Alphabet, Amazon, and Anthropic are also under scrutiny from antitrust enforcers on both sides of the Atlantic.
