October 22, 2020

Brussels regulates cryptocurrencies like Facebook’s Libra for the first time



The European Commission has adopted a new package of measures on digital finance on Thursday.

Valdis Dombrovskis, Economic Vice President, said: “An innovative and digital single market for finance will benefit Europeans and will be key to Europe’s economic recovery, by offering better financial products to consumers and opening new financing channels for the companies”.

The aim of the digital finance strategy is to make European financial services “more digit-friendly and stimulate responsible innovation and competition among EU financial service providers,” says the European Commission.

The strategy “will reduce the fragmentation of the digital single market, so that consumers can access cross-border financial products and financial technology startups can expand, and ensure that EU rules on financial services are adapted to the digital era, to applications such as artificial intelligence and the blockchain. ”

“The aim of the announced measures is to promote data sharing and open finance, while maintaining strict EU standards on privacy and data protection,” says Brussels, which says “to ensure a level playing field between financial service providers, whether traditional banks or technology companies: same activity, same risks, same rules. ”

Payments in stores

Furthermore, the Commission’s proposal “aims to offer secure, fast and reliable payment services to European businesses and citizens, making it easier for consumers to pay in stores and will make e-commerce transactions safe and practical” .

The Community Executive seeks “a fully integrated retail payment system in the EU, with instant cross-border payment methods. In this way, payments in euros between the EU and other territories will be facilitated and the emergence of pan-European and local payment solutions will be promoted. “.

Crypto assets

For the first time, the European Commission has proposed new legislation on crypto assets (a digital representation of securities or rights that can be stored and traded electronically).

The regulation on crypto asset markets “will drive innovation, while preserving financial stability and protecting investors from risk. This will bring legal clarity and security to crypto asset issuers and providers,” Brussels says.

“The new rules”, according to the European Commission, “will allow operators authorized in one Member State to provide their services throughout the EU (‘passport regime’). Safeguards include capital requirements, custody of assets, a mandatory procedure claims available to investors and investor rights vis-à-vis the issuer. Issuers of crypto assets backed by significant assets (so-called global ‘stablecoins’ such as Facebook’s Libra) would be subject to more stringent requirements (for example in terms of capital, investor rights and supervision) “.

The Commission is also proposing a pilot regime for market infrastructures wishing to attempt to trade and settle financial instrument operations in the form of crypto assets.

The pilot regime represents a so-called “sandbox” or “controlled environment” approach, allowing “temporary exceptions to existing rules so that regulators can gain experience in using distributed ledger technology in market infrastructures,” while ensuring that they can cope with risks related to investor protection, market integrity and financial stability. The aim is to allow companies to experiment and learn more about how current regulations are applied in the practice “, says the European Commission.

A few days ago, the Ministers of Economy and Finance of Germany, France, Italy, Spain and the Netherlands signed a joint declaration in which they asked the European Commission to guarantee the monetary sovereignty of the eurozone and the role of the ECB as the sole issuer of currencies before the push of calls stable coins: cryptocurrencies that are associated with an official currency, such as the dollar or the euro, or assets such as gold.

“We want a simple principle: the ECB is the only entity that is allowed to issue a currency, and this point is something that cannot be damaged or weakened by any project, including Libra. [la criptodivisa de Facebook]”Summarized the Frenchman Bruno Le Maire. Along the same lines, the Vice President for Economic Affairs, Nadia Calviño, indicated that the declaration is based on three priorities: monetary sovereignty, financial stability and consumer protection:” The citizens they have to be safe and feel protected by the monetary system that we have given to ourselves. ”

Digital operational resilience

“Technology companies are increasingly important in the financial sphere,” says the European Commission, “both as providers of information technology to financial companies and as providers of financial services.”

In this sense, the Digital Operational Resilience law proposed this Thursday “aims to guarantee that all participants in the financial system have the necessary safeguards to mitigate cyberattacks and other risks. The proposed legislation will require all companies to ensure that they can withstand any kind of information and communication technology (ICT) related disruptions and threats. The proposal also introduces a monitoring framework for ICT providers, for example providers of cloud computing services. ”


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