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Home » Daily Briefing » Daily briefing - 10 July 2019

Daily briefing - 10 July 2019

Important Europeans are calling for something to be done to fight the growing American and Chinese dominance of financial products. We say this tongue in cheek of course, because important Europeans have been calling for a Europe-wide instant payments system for years, while being totally ignored by banks, who have their own perfectly good, expensive and slow systems and are not keen to exchange them for free fast systems. Yesterday it was the Bank of France governor Francois Villeroy de Galhau warning Europeans that while they've been sitting around drinking wine and eating cheese, Americans and Chinese are grabbing the European payments market. 'The raw truth, however, is that the European payments market is already dominated by non-European stake-holders,' Villeroy told a finance conference in Paris. 'I call for the creation of pan-European payment solutions, building on a common brand and on the technical success of the Target Instant Payment Settlement infrastructure,' he said, according to Reuters. "Real-time payments have been possible in the 19-country euro zone since 2017, but only about half the bloc's banks have joined the scheme that underpins those transactions and it is mostly used for domestic payments. The European Central Bank began the TIP service for settling electronic payments at the end of last November, but banks have been slow to adopt it, even though it is cheaper and more secure than their own systems, ECB board member Benoit Coeure said on Sunday at a conference in southern France." News of Facebook's Libra coin had been another wake up call for Europe, said Reuters.

RBS has been so reviled for its economy-busting rise and fall that it's willing to break ranks with the other banks and talk to Facebook about Libra. Isn't it likely that the first bank to talk to Facebook will be pitching as a custodian for all those currencies that will allegedly keep the Libracoin stable? Not necessarily. All that cash is very expensive to hold on to these days. As Kevin Hanley, RBS's head of innovation, told journalists on Tuesday: "We're in discussions with Facebook around Libra and what it might be and where it might go." According to Yahoo, Hanley stressed that no immediate announcements were in the works. "It has no punchline yet but we'd very much engage and see rather than wait and find out," he said. Mr Hanley didn't rule out joining the Libra Association but said RBS could eventually be involved in other ways. "The conversations with Facebook about our involvement take many forms and shapes," he said. "It's not: do we want to put £10 million in and be a founding partner — it's the least of everyone's considerations. There's all sorts of things that we can bring to the party, whether it be our foreign exchange capability, a whole load of merchant acquiring capability that they would be equally interested in, there's a whole load of payment functionality that could be helpful to them." RBS, incidentally, has recently rolled out the digital bank brand Bó. Will Bó be the first UK wallet holding Libra coins? Incidentally, we're coming around to the name Bó, which means cow in Irish, and look forward to saying 'Bó' when tapping to make payments.

The BBC is running a series of letters by African journalists on Libra and Facebook, as there's a nuanced debate going on about the company's ambitions and the justified fear of a new digital colonisation of the continent. "As a Zimbabwean living in South Africa, I have become numb to the daylight robbery that ensues whenever I receive money from abroad or send cash to my family back home," writes Zimbabwean technology writer Andile Masuku. "As such, like many other cautious pragmatists, I relish the prospect of a network like Libra permanently disrupting the lucrative cash remittance businesses of large banks and money transfer services like Western Union and MoneyGram." Masuku argues that Facebook's business model of monetising user data, at a continent-wide level of dominance, has unknown and unknowable future consequences. "With that all said,", "if on a future Sunday I could send my folks $100 to pay for some cattle vaccines via a WhatsApp message, and they could immediately go to their local agri-mart and Opera browser's Opay raises $50m to expand African operations

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