Good Morning Dinar Recaps,

HAS ECB CRACKED THE CODE FOR DIGITAL EURO CBDC ADOPTION?

Two economists at the European Central Bank have modelled how to get consumers to adopt a central bank digital currency (CBDC) and the digital euro in particular. 

They distinguish between adoption and usage. While consumers may decide to include a new payment method, they won’t necessarily use it that often.

To create their model, the economists used the 2022 ECB Study on Payment Attitudes of Consumers in the EU (SPACE). Given it was post COVID, it showed changes in payment behaviors such as an increase in usage of mobile payments for person-to-person payments which rose from 3% in 2019 to 10% in 2022.

Unsurprisingly, they found consumers prefer to stick to familiar methods, such as cards and cash. Switching incurs a significant adoption cost, in terms of money, time and effort.

Three steps to make adoption worthwhile
One avenue to make the switching costs worthwhile is to design the CBDC to combine the relative advantages of both cards (usability) and cash (controlling usage and privacy). The model showed this could increase adoption by 80% and usage by 140%.

A second strategy is to communicate these benefits effectively. While this had some benefit, the impact was smaller compared to the design choices.

Thirdly, the economists highlight the importance of surfing network effects. We believe this implies there could be different strategies for different jurisdictions. In some regions P2P payments might be more popular, so this could be the area to push. In other jurisdictions there may be more potential for Point of Sale payments (PoS). For example, the SPACE survey showed usage of mobile payments at PoS at 10% in the Netherlands versus 1% in Slovenia.

They argue that regions more eager to adopt new payment technologies will be more open to CBDC. That makes sense. However, we see a counterargument that if users adopt new payment technologies they could perceive less need for a CBDC.

The economists also highlight the role of legislation in ensuring distribution, such as obliging banks, and requiring merchants to accept the digital euro at PoS.

Other digital euro reports
Meanwhile, in other digital euro news, during August an NEBR paper explored the impact of a potential digital euro on banks, European payment providers and US payment providers.

 It found upbeat press mentions of a digital euro coincided with positive stock price movements for European payment firms and negative ones for American firms. There was no impact on banks.

Another report was published by the Veblen Institute and Positive Money, two organizations that are critical of banks. They highlight that there’s an option for the ECB and national central banks to sidestep private payment providers and go direct to consumers.

We confirm that legally the central banks and governments are also ‘payment service providers’ (PSPs), and it is PSPs that will provide wallet services for the digital euro, per draft legislation.

The IMF recently published a report on CBDCs exploring how to encourage adoption by consumers and merchants.

@ Newshounds News™

Source:  Ledger Insights

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COULD ROBINHOOD AND REVOLUT FIND STABLECOIN SUCCESS WHERE PAYPAL STUMBLED?

If Robinhood and Revolut do make a run at launching a stablecoin, as reported, can they each avoid the same fate as PayPal's PYUSD?

Fintech heavyweights Robinhood, a U.S. investing app, and Revolut, a crypto-friendly neobank based in London, are considering launching their own stablecoins, unnamed sources told Bloomberg this week.

The giants are eyeing the stablecoin market at a time when Tether (USDT), with its $119 billion market capitalization, accounts for roughly 68% of the $173.5 billion category.

With Europe offering clearer regulatory frameworks, the fintech giants could bring a new wave of competition. However, the question remains: Can they break through Tether's dominance, or will they struggle like other giants before them?

Although neither company has officially confirmed their plans, both companies are considering stablecoin issuance, according to a report on September 26.


Fred Schebesta, founder of Finder.com, sees the potential for Robinhood and Revolut but acknowledged the challenge.

“Revolut and Robinhood definitely have a shot at making a dent in USDT’s dominance, but it's going to take a lot of integration to get there,” he said. “USDT has a deep-rooted presence in the market, and people, for some reason, still place an unusual amount of trust in it.”

He said PayPal's stablecoin demonstrates that “even big players aren’t gaining much traction yet,” but added that Robinhood and Revolut have a chance to try a different approach.

“Their platforms are more integrated with retail investors,” Schebesta said, “and if they can leverage those ecosystems properly, they might find an edge that PayPal hasn't tapped into yet.”

Pav Hundal, a market analyst at Australian crypto exchange Swyftx, agrees that scale will be crucial.

“Stablecoins are a game of scale, or relative scale if you have a niche offering,” he told Decrypt. “Robinhood and Revolut possess scale in abundance and clearly have some level of conviction that they can leverage their huge global networks to take a slice of Tether’s market.”

The two companies also have one major advantage, he added: Both companies are already regulated in many jurisdictions around the world. “But for now, Tether exists on an entirely different plane of existence to its competitor,” Hundal said.

PayPal isn’t alone in its struggles with PYUSD. Even giants like JPMorgan Chase, Meta (Facebook), and Binance have attempted to conquer the stablecoin world—each meeting their own unique challenges and limitations.

JPM Coin found its place within internal banking but failed to penetrate wider retail or DeFi markets. Meta’s Diem, once heralded as the “future of money,” crumbled under regulatory pressures, never seeing the light of day.

Binance's BUSD has grown, but even it remains a distant competitor to Tether, unable to topple the giant.

Tether’s entrenched position as the crypto exchanges’ primary trading pair sets a high bar for liquidity that new entrants must match. The stablecoin market's deep liquidity pools, network effects, and established trust create high barriers for new entrants.

@ Newshounds News™

Source:   Decrypt  

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XRP LEDGER IMPLEMENTS TWO MAJOR UPDATES TO BOOST ECOSYSTEM FUNCTIONALITY

▪️XRP Ledger announces two updates that enhance its functionality.

▪️Ripple’s stablecoin RLUSD may benefit from these new updates.

▪️Continued blockchain advancements support Ripple's ecosystem growth.

The XRP Ledger (XRPL) has announced two significant updates following a recent modification. 

These developments have attracted attention, particularly due to rising expectations surrounding the potential launch of Ripple’s stablecoin, RLUSD. Consequently, there is curiosity about how these updates will impact the stablecoin’s functionality and the overall ecosystem.

XRP Ledger Executes Two Major Updates
According to an XRPScan report, the XRP Ledger implemented two important updates named “fixEmptyDID” and “fixPreviousTxnID” last Friday. Both updates received support from 31 validators, surpassing the 28/35 threshold.

The first update aims to prevent the creation of empty DID ledger entries that previously occupied unnecessary space. With this change, any transaction attempting to create such entries will result in an error. This endeavor is expected to enhance ledger efficiency without interfering with existing processes.

Will Ripple’s Stablecoin RLUSD Be Affected?
Ripple $0.620272 has begun beta testing its stablecoin on both the XRPL and Ethereum $2,675 networks. Recently, Ripple released two batches of the RLUSD stablecoin, each containing 485 RLUSD. These developments have intensified speculation regarding how the recent updates on XRPL will influence the operation of the stablecoin.

Ripple President Monica Long confirmed that RLUSD would be launched this year if it receives U.S. approval.

Long expressed expectations that the stablecoin would serve broader areas compared to Ripple’s native cryptocurrency, XRP. She also noted that decentralized exchanges (DEX) on the XRPL could benefit from the stablecoin’s efficiency, while XRP would be utilized for smaller cryptocurrency transactions.

These statements suggest that the recent XRPL updates could empower both RLUSD and the XRP ecosystem, offering more functionality and flexibility across multiple applications.

In a period marked by continuous advancements in blockchain technology, such technical updates within the XRP Ledger may contribute to strengthening the Ripple ecosystem and enhancing investor confidence.

@ Newshounds News™

Source:  CoinTurk

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IS THE US DEBT CLOCK ACCURATE? LET'S PEEK  |  Youtube

@ Newshounds News™

Source:  Seeds of Wisdom Team Currency Facts

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