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The Euro Banking Association Publishes Crypto Technologies Report

Op-ed - The Euro Banking Association Publishes Crypto Technologies Report

The Euro Banking Association (EBA) has published two reports on Digital Customer Service Interfaces (DCSI) and crypto-technologies, with the intention of detailing the electronic payments landscape of the future. The reports have been announced at the EBAday payments conference in Amsterdam, Finextrareports.

The Euro Banking Association is a practitioners’ body for banks and other service providers supporting a pan-European vision for payments, with membership including more than 180 institutions from across Europe and beyond. Its mission is to provide payment professionals with a country-neutral forum for driving and contributing to the delivery of pan-European co-operative payment initiatives and business practices.

The reports, produced by the EBA’s Working Group on Electronic Alternative Payments (e-AP WG), are intended to help financial institutions (FIs) navigate the changing payments landscape. The publication of the EBA reports follows closely the EU Commission’s “Blockchain and Digital Currencies Workshop” on April 27.

According to the EBA, digital currencies such as bitcoin or ripple have the ability to disrupt the payment and banking landscape and assist in the fight against cyber-criminals.

The opinion paper on Digital Customer Service Interfaces focuses in particular on a ‘virtual layer’ on top of the existing single euro payments area (SEPA) transfer and card payment infrastructure, referencing the EBA’s MyBank offering that is seeking to become a ‘one stop shop’ e-commerce transaction platform.

The crypto-technologies paper, titled “Cryptotechnologies, a major IT innovation and catalyst for change,” is an information paper for transaction banking and payments professionals. It details four categories (currencies, asset registry, application stack, asset centric), applications such as remittances and real-time payments and scenarios, and describes the respective potential for these different categories of applications to have a major short-term impact on the architecture of systems and processes in a number of digital transaction-based industries. It also details four use cases for the most promising category. It concludes by setting forth four different scenarios of how organizations in transaction banking and payments could position themselves with regard to these new technologies.

“Cryptotechnologies are a key subject for further study for transaction banking and payment professionals, especially against the background of evolving financial infrastructures,” said Vincent Brennan, deputy chairman of the Euro Banking Association and chair of the EBA e-AP WG. “The information paper put together by the e-AP Working Group provides a hands-on introduction to this topic, which specifically focuses on the practical potential and related implications of cryptotechnologies for the transaction banking and payments area in the short to medium term.”

The four scenarios analyzed by the paper reflect different degrees (high and low) of cooperation between banks and the crypto-community, and crypto-adoption by banks. The four scenarios are dubbed:

  • “Out in the cold” – the creation of a separate cryptoconomy.
  • “First amongst equals” – an approach where individual payment service providers (PSPs) strive to position themselves as developers of cryptotechnology applications.
  • “Awake and aware” – a collaborative approach based on constant dialogue and possible partnerships in selective areas.
  • “United we stand” – a collaborative approach based on partnerships between PSPs and the cryptotechnology community embracing a successful integration of processes.

Fidor Bank, a bitcoin-friendly German bank that makes extensive use of social media, is presented as a technology innovator and an example of a bank that leverages the latest regulation to provide cryptotechnology-powered services to its customers.