European Commission: the future of finance is digital

The words of Valdis Dombrovskis, executive vice president of the European Commission for "An economy at the service of people", are clear: "The future of finance is digital". And starting from this assumption, the EU undertakes the related commitments to ensure that we can pursue responsible innovation capable of providing all the necessary guarantees for the benefit of consumers and businesses.

future of finance is digital

During confinement it is thanks to digital technologies, such as online banking, that people have had access to financial services. Technology has much more to offer consumers and businesses, and we should more proactively embrace the digital transformation while mitigating potential risks. This is the aim of the package adopted today. An innovative digital single market for finance will create benefits for European citizens and be crucial for Europe's economic recovery by offering better financial products for consumers and opening up new financing channels for businesses.

Valdis Dombrovskis

The program plan drawn up by the Commission is divided on three fronts:

strategy for digital finance strategy for retail payments proposals on crypto-assets operational resilience

Strategy for digital finance

The first objective pursued is refinement (especially from a financial perspective) of that digital single market on which Europe has been working for some time. Part of the same programmatic plan are regulations on AI and blockchain, on data management and on a more pronounced propensity for data exchange and open finance. Above all, "the strategy aims to ensure a level playing field between financial service providers, be they traditional banks or technology companies: the same business, the same risks, the same rules": greater opportunities for new entrants, but also the demand for all those guarantees that must lock the savings, data and life projects of savers.

Strategy for retail payments

Not only does the EU want to push for the reduction of cash, but it it also intends to favor a cashless approach for payments between the EU and other jurisdictions. The circulation of digital money will therefore have to become pervasive, starting from the top down to everyday purchases:

It will be easier for consumers to pay in stores and carry out e-commerce transactions in a safe and convenient way . The strategy aims to achieve a fully integrated retail payments system in the EU, including instant cross-border payment solutions.

Legislative proposals on crypto-assets

One of the most important ( as well as an absolute novelty for the European legislative framework) is linked to a first EU approach to cryptocurrencies, for which a real regulation is imagined full of innovation as well as guarantees:

The "regulation on crypto markets -activity ”will stimulate innovation while preserving financial stability and protecting investors from risk. This will ensure clarity and legal certainty for issuers and providers of crypto assets. The new rules will allow operators authorized in one Member State to provide their services throughout the EU ("passport system"). Safeguards include capital requirements, safekeeping of assets, the mandatory complaint handling procedure available to investors and the investor's rights vis-à-vis the issuer.

The cryptocurrency imagining the EU must be a stablecoin monitored by stricter rules and requirements than today's laissez faire. In light of the many (too many) uncertainties that this type of border presents, the EU however intends to maintain an approach of extreme caution, imagining a sort of protected laboratory within which to develop the first market infrastructures in which to carry operations " crypto ":

The pilot scheme constitutes a so-called" sandbox "approach - that is, a space for experimentation in a controlled environment - which allows for temporary derogations from current regulations to allow regulators to gain experience on the use of technology register distributed in market infrastructures, while making sure that it can address the risks to investor protection, market integrity and financial stability.

Experimenting, monitoring, evaluating, correcting: only when the market will be duly mature, you can imagine opening the sandbox and letting cryptocurrencies come into contact, in the b in and in the bad, with the "traditional" market.

Operational resilience

There is an aspect on which Europe does not intend to compromise: only by investing in security can we imagine a finance more digital, thus being able to reap all the related advantages. Without security there are no structural foundations to be able to act on a higher and more widespread level than today. If the principle is known and shared, the novelty lies in the ways in which all this can be achieved under the aegis of the European Commission:

The proposed legislation will impose on all companies the obligation to guarantee that they can in the face of all kinds of disturbances and threats related to information and communication technologies (ICT).

In particular, the Commission will impose a specific surveillance framework for both TlC providers and service providers cloud. In this context, monitoring will be extensive and continuous, but at the same time each individual market player must be able to provide all the necessary guarantees in the face of possible risks that will arise. Only in this way can we speak of true resilience and seriousness in the approach to security.

Source: European Commission