EU Allows Banks to Hold 2% Equity in Crypto, Porsche NFT Launch Crashes

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The Parliament of the European Union approved new banking regulations on January 25, 2023 that will allow banks in the EU to hold a tiny portion of their capital in cryptocurrencies, according to a report by Binance.

Banks can hold a maximum of 2% of their capital in Bitcoin and other cryptocurrencies, according to the latest directive.

The European Union has continued its push for clear regulation for the crypto industry. The latest development comes after the final vote on draft EU legislation to regulate cryptocurrencies, courtesy of Crypto-Asset Markets Regulation (MiCA), which has been postponed until April 2023. due to technical difficulties.

The new directive states that volatile cryptocurrencies like Bitcoin will be considered the riskiest investment, and the EU now follows the Bank for International Settlements (BIS) guidelines in this regard, which essentially divides cryptos into two distinct groups.

Group 1 represents tokenized assets and stablecoins with approved stabilization mechanisms, while Group 2 includes stablecoins without BIS-approved stabilization mechanisms and volatile cryptocurrencies, according to the report.

“This group classification implies that Bitcoin, Ethereum and other cryptos require banks to apply a 1,250% ‘risk weight’. This means that banks in the EU must hold more than one euro of free capital for every euro of cryptocurrencies,” the report states.

The European Parliament’s Economics Committee has also approved several temporary derogations to give banks more time to adapt, the report adds.

Porsche’s NFT collection launch fails despite ambitious plans

German luxury car brand Porsche has reportedly only managed to sell around 25% of its first collection of 7,500 non-fungible tokens (NFTs), despite its ambitious plans to venture into the NFT space.

In just over 24 hours, some 1,909 NFTs had sold for 0.911 Ethereum per unit, or roughly $1,414 as of January 25, 2023, according to a Binance report.

“Our owners have spoken,” the Web 3.0-focused brand account said on Twitter.

“We will be reducing our supply and shutting down the Mint to move forward with creating the best experience for an exclusive community. More info in the next few hours,” he said.

Porsche’s NFT Mint closed on Jan. 25, 2023, at 6 a.m. UTC-5, according to the company.

The German automaker first showcased its NFT collection, which also includes images of the iconic Porsche 911 Carrera, at the Art Basel show last November, Fortune reported.

Commentators attributed the company’s inability to generate solid market interest to the automaker’s insufficient understanding of the rules that govern crypto markets and its detachment from Porsche’s traditional sales channels, according to Binance’s report. .

Some industry observers have criticized Porsche for its lack of sufficient cooperation with leaders in the crypto space and expect the sale to trigger high sales simply because it was launched by an internationally recognized brand, adds the report.

Saudi Central Bank to experiment with CBDC

The Saudi Central Bank (SCB), formerly known as SAMA, is now the latest financial entity to join the cryptocurrency industry by unveiling its plans to experiment with Central Bank Digital Currency (CBDC) alongside local banks and fintech companies in a step-by-step project.

According to agency reports, its current phase is where it is focused on using the CBDC as a useful tool for a type of national wholesale financial instrument in collaboration with other financial institutions, according to a Binance report. .

According to the report, SCB is exploring several areas, including the economic impact, market viability, and potential application of CBDC-based payment solutions.

Therefore, the plan to launch base money might be delayed as the decision is still pending.

Saudi media outlet Saudi Gazette noted in a report published on January 23, 2023 that “the SCB stressed that no decision has been taken regarding the introduction of CBDC in the Kingdom. He continues to focus on exploring the potential benefits and risks of implementing the CBDC.

Additionally, according to the outlet, the SCB will focus on “informed decision-making” within the central bank and CBDC research within the central bank ecosystem.

The CBDC experience is part of the broader goals of Saudi Vision 2030.

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