Skip to main content
Skip to main content
The Digital Pound Foundation (DPF), a group of technology, innovation, and regulatory experts, has announced its launch as an independent non-profit organization in the U.K.
According to a release issued on Thursday, the DPF will work to promote the implementation of a central bank digital currency (CBDC) in the country.
Indeed, as previously reported by Cointelegraph, the U.K. government in April established a CBDC task force to explore preliminary matters related to the creation of a national digital currency.
The DPF, as part of its stated mandate, will carry out research and engage in collaboration with stakeholders to support the U.K.’s CBDC project.
In addition to supporting developmental efforts, the foundation will also reportedly advocate for robust regulations for the U.K.’s CBDC project as well as favorable legal provisions for privately issued digital currencies.
According to Jeremy Wilson, chairman of the DPF, the social and technological ramifications of a CBDC for the U.K. are profound, hence the need for creating the group to provide the necessary support to all stakeholders.
The DPF may likely join the cast of payment and fintech experts already lined up by the Bank of England to contribute to the U.K’s CBDC development efforts.
Recently, famous whistle-blower and former United States Central Intelligence Agency agent Edward Snowden described CBDCs as a perversion of cryptocurrencies.
In a written note to Cointelegraph, Wilson offered a different opinion, stating, “Our view is that CBDCs should not be considered on the same spectrum as cryptocurrencies. The two are fundamentally different in their conceptualization, and in the use cases to which they would respectively be applied.”
Related: UK chancellor names CBDC on list of financial reforms for Treasury
According to the announcement, Wilson and the other originating members of the DPF are joined by associate members including Ripple, Quant, Electroneum and The Realization Group.
Electroneum CEO Richard Ells will also serve as a member of the board of directors of the DPF. According to Ells, CBDCs have the potential to contribute meaningfully to promoting greater financial inclusion across the globe.
In a survey of 2,500 adults in the U.K. published back in August, 30% of participants stated their belief that a CBDC could cause more harm than good in the country.
The United Kingdom’s central bank is ramping up its research into a central bank digital currency (CBDC) with the selection of a long list of banking and fintech experts to assist it.
On Sept. 29 the Bank of England announced the membership of its CBDC Engagement and Technology Forums and they include some big names in technology and finance including Google, Mastercard, Consensys — and even Spotify.
This week’s announcement is a signal that the central bank is taking its CBDC plans seriously. It stated that the Technology Forum draws resources from leading experts in the field of digital payments and cryptocurrencies.
“The Forum will help the bank to understand the technological challenges of designing, implementing and operating a CBDC.”
The Engagement Forum includes “senior stakeholders from industry, civil society, and academia,” that will assist the bank and Treasury to “understand the practical challenges of designing, implementing and operating a CBDC.”
Technology experts include PayPal’s blockchain and cryptocurrency Chief Technology Officer, Edwin Aoki. Principal Software Engineer at Google, Will Drewry, joins him as does CBDC and Payments Manager Matthieu Saint Olive from Ethereum software solutions firm ConsenSys.
The Technology Forum also includes executives and payments experts from Amazon Web Services, MasterCard, Visa, Stripe, IMB, R3, and music streaming platform Spotify.
The Engagement Forum is comprised of banking executives and business experts including co-CEO of Global Banking and Markets at HSBC, Georges Elhedery, Morgan Stanley’s COO Arun Kohli, and Stephen Gilderdale, Chief Product Officer at interbank communication standard SWIFT.
Related: UK chancellor names CBDC on list of financial reforms for Treasury
The Bank of England began tentatively researching CBDCs in November 2020 as reported by Cointelegraph. In April, the central bank posted a list of vacancies related to CBDC research and development.
It remains skeptical of cryptocurrencies however, with Bank of England Governor Andrew Bailey warning about the risks of trading cryptocurrencies in May, telling investors “buy them only if you’re prepared to lose all your money.”
PayPal users with accredited identities will start accessing cryptocurrency trading soon. However, cryptocurrency transactions for its business account are not supported yet.
Starting from this week, U.K residents will have initial access to buying, holding, and selling cryptos via PayPal. This development will make a remarkable milestone for a firm that started providing digital asset services within one year.
PayPal is an American multinational financial technology company that operates an online payments system. It’s a global payment provider with services accessed in most countries that support online money transfers.
PayPal serves as an electronic alternative to traditional payment methods such as checks and money orders.
Related Reading | 37% Of U.S. Investors Decline To Liquidate Cryptocurrency Assets in Bearish Situations
On Sunday, the popular payment provider declared its intent to allow U.K customers access to cryptos. The cryptos are Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC), and Bitcoin (BTC). Of course, you can always access them via mobile app or website.
The Sunday announcement marked PayPal’s first expansion of crypto services outside the U.S and was initially launched last year November.
Jose Fernandez da Ponte cited money digitization during COVID-19 as one of the main motivations for embracing crypto. Jose Fernandez is a high-ranked executive for PayPal’s cryptocurrency division. He added that;
“Our expertise on global digital payments provides us with the opportunity and responsibility of helping U.K. residents to explore cryptocurrency. This adds to our businesses and consumers knowledge combined with various security and compliance controls.”
By making its crypto services available to U.K. residents, the online payment giant plays a role in increasing the country’s cryptocurrency exposure.
After a sudden pullback, the market is back on bullish track | Source: Crypto Total Market Cap on TradingView.com
According to reports, the payment giant has the highest penetration among other European countries in U.K.with over 2 million active users monthly.
Rumors on PayPal’s crypto expansion proposal have been in circulation since the past month after Dan Schulman’s speech. Dan Schulman’s CEO had earlier informed investors on the soon coming PayPal services to the U.K. residents.
Reports further show that PayPal’s eye development in Defi is a precursor to integration plans in the future. The Financial Conduct Authority (FCA) on regulation in the U.K. goes down on some crypto exchanges. These are exchanges that have not met their registration demands.
Related Reading | Facebook Officials Claim Novi Received Approval From Major U.S. States
For example, FCA shuttered the operations of Binance U.K. after warning them against providing regulated trading activity in the country this summer.
PayPal’s da Pote Jose gave assurance that his company will keep working with U.K. regulators and others to roll out its cryptocurrency services.
Featured image from Pixabay, chart from TradingView.com
Global payments platform PayPal is looking towards the United Kingdom as the next market in which to expand its crypto trading services.
According to the company’s second-quarter earnings call on Wednesday, PayPal has done very well out of crypto trading for the period. CEO Dan Schulman stated that the U.K. is likely to be the next country where crypto trading is offered.
“Yeah, well, we continue to be really pleased with the momentum we’re seeing on crypto. […] We’re going to launch, hopefully, maybe even next month in the U.K., open up trading there.”
He stated that the company is adding “incremental functionality” to the crypto trading platform, having already increased the crypto purchasing limits to $100,000 per week on July 15.
PayPal is also working on open banking integration, Schulman stated, adding that it “will increase the ability to fully integrate it into ACH and do faster payments.” ACH is PayPal’s Automated Clearing House, a payment service that enables merchants to electronically collect payments from customers by directly debiting their checking or saving accounts.
Schulman revealed that Pay with Venmo revenues grew by 183% year over year, and thathere has been strong adoption and trading of crypto on Venmo. The PayPal-owned firm Venmo launched crypto trading services to an estimated 70 million users in mid-April.
Related: Will PayPal’s crypto integration bring crypto to the masses? Experts answer
Regarding decentralized finance, Schulman suggested that PayPal was looking into “what the next generation of the financial system looks like” and how to integrate smart contracts and decentralized apps into the platform:
“How can we use smart contracts more efficiently? How can we digitize assets and open those up to consumers that may not have had access to that before? There are some interesting DeFi applications as well. And so we are working really hard.”
The comments come at the same time a leaked video from last week’s EthCC conference in Paris revealed that the world’s largest decentralized exchange, Uniswap, has been in talks with PayPal, among other fintech firms, regarding DeFi integration.
On July 28, Cointelegraph reported that PayPal’s “super app” which will feature high yield savings, early access to direct deposit funds, messaging capabilities, and additional crypto functionality, is almost ready for launch.
The United Kingdom’s Financial Conduct Authority (FCA) has created an 11 million pounds sterling ($15.2 million) digital marketing campaign to warn citizens about the risks associated with crypto investments.
Nikhil Rathi, chief executive of the FCA, made this known in a draft speech for the agency’s webinar titled “Our Role and Business Plan” delivered on Thursday.
Detailing the FCA’s decision to create the campaign fund, Rathi stated that the U.K. regulator is concerned about the increasing adoption of crypto investment among the younger demographic.
According to the Rathi, “more people are seeing investment as entertainment” and that such irrational behavior may lead to significant losses on their part:
“This is a category of consumer that we are not used to engaging with 18 to 30-year-olds more likely to be drawn in by social media. That’s why we are creating an £11m digital marketing campaign to warn them of the risks.”
According to Rathi, the risks involved in crypto investments are “stark” with the FCA boss restating the agency’s popular refrain that people should be “prepared to lose all their money” if they invest in cryptocurrencies.
Related: UK advertising watchdog classifies crypto ads as ‘red alert’
The FCA’s digital marketing campaign is coming on the heels of actions taken by the U.K.’s Advertising Standards Authority against crypto ads deemed “misleading and socially irresponsible.”
As previously reported by Cointelegraph, the U.K. ad watchdog agency ordered crypto exchange platform Luno to halt its “time to buy” Bitcoin (BTC) advert. Earlier in July, the advertising regulator announced a crackdown on cryptocurrency-related ads which the body described as a “red alert” priority.
Apart from the crypto warning campaign, the FCA boss also stated that the agency will continue to focus on robust examinations of “financials and business models” for operators in complex markets like cryptocurrencies especially in the area of Anti-Money Laundering compliance.
As the crypto crackdown continues in Britain, another high street bank has intensified its efforts to curtail its customers’ use of digital assets.
The Natwest Group has reportedly capped the daily amount its customers can send to cryptocurrency exchanges due to concerns over investment scams and fraud, according to a June 29 report from Reuters. However, it was not revealed what those new limits were in terms of fiat currency transfers.
The temporary cap was imposed on June 24. The restriction targets several cryptocurrency exchanges, including Binance. The high street bank claims to serve 19 million customers in the U.K.
The spokesperson for NatWest stated that it has recently seen a high level of cryptocurrency investment scams targeting its customers, particularly through social media sites, addi:
“To protect our customers from the criminals exploiting these platforms, we’re temporarily reducing the maximum daily amount that a customer can send to cryptocurrency exchanges as well as blocking payments to a small number of cryptocurrency asset firms where we have seen particularly significant levels of fraud-related harm for our customers.”
The restrictions imposed by NatWest come at a time when the U.K. financial watchdog, the Financial Conduct Authority (FCA), is tightening its grip on unregulated cryptocurrency trading platforms.
Related: UK regulator warns against 111 unregistered crypto companies… and FOMO
In April, the bank stated it will refuse to serve business customers who accept payment in cryptocurrencies such as Bitcoin, which the UK lender had categorized as “high risk.”
On June 20 United Kingdom-based financial institution TSB Banking Group announced that it will be barring its 5.4 million customers from buying crypto assets.
The restrictions do not end with high street banks. On Monday, June 28, Binance suspended the popular local payments provider, Faster Payments, for its U.K. customers, further limiting the options for moving GBP to and from the exchange.
Binance’s U.K. customers are currently unable t use the popular local payments provider, Faster Payments, to withdraw British pounds (GBP) from the exchange.
On Monday, June 28, a notice on the Binance website declared that GBP withdrawals via Faster Payments had been “suspended for maintenance,” according to the Financial Times.
Faster Payments is a payment provider used by major banks to process near-instant payments. It has become one of the preferred channels for moving fiat currencies to and from the Binance exchange.
According to the report, U.K. users can still use traditional methods such as bank cards to move money from the exchange. However, the exchange acknowledged that the suspension of Faster Payments presents a significant hurdle.
The move follows a June 27 order from the U.K.’s Financial Conduct Authority (FCA) demanding Binance cease all regulated activities in the country following a review of its operations.
Related: Binance served warning by Japan’s FSA for operating without authorization
“Binance Markets Limited is not permitted to undertake any regulated activity in the UK,” said the FCA’s letter, noting that no other entity in the Binance Group holds any of the necessary permits to operate in the United Kingdom.
On June 28, the exchange countered that Binance Markets Limited is “a separate legal entity and does not offer any products or services via the Binance.com website,” adding: “The FCA UK notice has no direct impact on the services provided on Binance.com.”
Binance launched its U.K. trading platform for institutional and retail investors under the supervision of the FCA in June 2020.
British regulators have forced bitcoin exchange Luno to take down ads recommending bitcoin purchases.
A creative advertising slogan curated by Luno, a United Kingdom-based bitcoin exchange, has been banned by the U.K.’s Advertising Standard Authority (ASA), according to a recent report from CNBC.
Posters displayed across the London Underground network and on London buses prominently stated slogans like, “If you’re seeing bitcoin on the underground it’s time to buy.” The ASA quickly demanded that the ads be taken down, declaring that the campaign failed to highlight the risks associated with investing in bitcoin.
The ASA declared that Luno must ensure that their future marketing communications make “sufficiently clear that the value of investments in bitcoin was variable and could go down as well as up,” per CNBC.
Paired with this, the ASA said that Luno needs to highlight that it and the bitcoin market at large are unregulated.
The ASA banning ads due to concerns that the price of bitcoin fluctuates while implying that the asset is not a safe store of value coincides with the beliefs of many central bankers across the globe. Yet these statements are inherently hypocritical, as all fiat currencies issued by central banks have devalued at a rapid pace over the course of history, clearly seen by the British pound’s massive devolution over time, for instance.
The ASA proclaiming that the ad is “irresponsible” is a ridiculous notion. Most entities would rather promote fiat currencies than bitcoin. Yet, bitcoin is the only tool that protects one’s time from being stolen away. In reality, not promoting bitcoin is an irresponsible choice.
Corporate clients of NatWest may soon lose their banking relationship with the United Kingdom-based lender amid recent negative cryptocurrency-related policy statements.
According to a report by The Guardian, Morten Friis, the head of the bank’s risk committee, has revealed that NatWest will refuse service to business customers that accept cryptocurrency payments.
Friis made the bank’s position known during Wednesday’s shareholder event, stating:
“We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies, or otherwise transacting in cryptocurrencies as their main activity.”
Friis’ comments echo similar sentiments recently attributed to HSBC, another U.K. bank, that used identical statements in announcing its decision to bar customers from buying MicroStrategy stock. HSBC’s anti-crypto stance also saw the bank refuse to allow account holders to deposit profits from cryptocurrency exchanges earlier in the year.
According to Friis, the bank’s decision is borne out of the need to proceed cautiously with cryptocurrencies, given the emerging nature of the industry’s regulatory landscape. The NatWest board member added that the bank will continue to monitor the evolution of cryptocurrency regulations from the U.K. Financial Conduct Authority.
Back in March, the FCA mandated all U.K. crypto firms to begin submitting yearly financial crimes reports.
Meanwhile, the NatWest executive’s comments could have significant implications for corporate clients like WeWork and Tesla that have announced plans to accept crypto payments.
In addition to withholding banking services to corporate clients involved in crypto, Friis also stated that NatWest will increase its financial crimes scrutiny for personal account holders dealing in cryptocurrencies.
Friis pointed to the money laundering and illicit financial activities as justification for its increased security checks on individual clients engaging in crypto activities.
However, numerous studies notably show that criminal activities only constitute a minute proportion of global cryptocurrency commerce.