EU sets a foundation for financial market digitalisation
The EU Commission wants to support financial market digitalisation with a comprehensive regulatory package. Yesterday, authorities in Brussels presented proposals for the handling of crypto-currencies and increased cyber-security in the financial sector. They also introduced a new payment services strategy. So-called Stablecoins like Facebook’s Libra are to be subjected to strict rules.
“We should take a proactive approach to digital transformation,” stressed EU Commission Vice-President Valdis Dombrovskis.
The digital single market for financial services is also of crucial importance for Europe’s economic recovery.
The financial sector responded positively to the Commission’s proposals. Andreas Krautscheid, Chief Executive of the Association of German Banks (BdB), spoke of “unmistakable, clear signals for Libra and co.” Regulation of digital currency is long overdue. “It is about Europe’s digital currency sovereignty.” Federal Minister of Finance Olaf Scholz (SPD) announced that the digitalisation package and new action plan for the Capital Market Union, also presented yesterday, will be on the agenda at the next meeting of EU finance ministers in early October.
“With these proposals, we can promote innovation in the financial sector so that Europe sets standards worldwide.”
According to Philipp Sandner, Head of the Blockchain Centre at Frankfurt School of Finance & Management, the EU’s crypto proposals successfully set a broad and comprehensive set of standards. In an interview with Börsen-Zeitung, Sandner said that the proposal would cover about 95% of existing crypto-assets currently by market capitalisation and 85% by amount.
To deepen the Capital Market Union, the EU Commission announced an action plan with 16 measures with implementation beginning in 2021. “We have 27 national capital markets that are not fully developed and integrated,” Dombrovskis complained in Brussels. The measures include a review of current regulatory requirements, more robust investment protection, harmonisation of insolvency rules and the creation of a single access point for company data.
Source: Börsen-Zeitung, 25 September 2020, Andreas Heitker, © All rights reserved.
Image: Gerd Altmann/Pixabay
