All the key takeaways – and the EU‘s big plans for blockchain and cypto
At the end of September, the European Commission adopted its Digital Finance Package, a complex set of initiatives aiming to achieve a comprehensive EU regulatory framework for financial services fit for the digital age and alleviating the fragmentation in the Single Market for digital financial services. The package‘s goal is to foster a competitive EU financial sector that gives consumers access to innovative financial products while ensuring consumer protection and financial stability.
This advanced development is based on the extensive work of several institutions in digital financial services. In this context, the developments in the framework of the FinTech Action Plan of 2018 and the work of the European Parliament and of the European Supervisory Authorities (ESAs) should be emphasized. While innovation in finance is not new, investment in technology and the pace of innovation have increased considerably. FinTech solutions using digital identification, mobile applications, blockchain, and distributed ledger technologies are being rolled out. In the financial sector, firms are supervised based on their activities, services, or products, regardless of whether they use traditional or innovative means to deliver those services. Depending on the services and products offered, firms can be regulated under EU or national law, or not be subject to any financial services specific regulation. Accordingly, consultations that consider the consumers´ interests are of particular importance in regulatory work.
Main package‘s provisions and details
The package consists of four cornerstones, including a digital finance strategy, strategy on retail payments, legislative proposals on crypto assets, and legislative proposals on operational resilience.
The Digital Finance Strategy sets out general lines on how the EU can support the finance‘s digital transformation, considering risks regulation. Four main priorities are a common contribution to development: removing fragmentation in the Digital Single Market, adapting the EU regulatory framework to facilitate digital innovation, promoting data-driven finance and addressing…