The European Commission, after extensive public consultations and outreach efforts in digital finance, adopted a digital finance package on September 24, 2020. This package includes a digital finance strategy and legislative proposals regarding crypto-assets and digital resilience. Its purpose is to promote a competitive EU financial sector that provides consumers with access to innovative financial products while upholding consumer protection and financial stability. This initiative aligns with the EU’s ambition for a digital-focused recovery and aims to modernize the European economy through digital financial services.
The digital finance strategy outlines key priorities, such as eliminating fragmentation in the Digital Single Market, adjusting the EU regulatory framework to facilitate digital innovation, promoting data-driven finance, and addressing challenges related to digital transformation, including enhancing the digital operational resilience of the financial system. Embracing digital finance can drive European innovation, offer improved financial products, expand funding opportunities for EU businesses, and support the Green Deal and the New Industrial Strategy for Europe.
Enhancing digital finance can also boost cross-border operations, promote financial market integration, and strengthen Europe’s economic and monetary union. A robust European digital finance sector contributes to Europe’s open strategic autonomy in financial services and the capacity to regulate and supervise the financial system effectively.
The legislative proposals on crypto-assets aim to harness the potential of crypto-assets while managing risks for investors and financial stability. The framework differentiates between crypto-assets already governed by EU legislation and unregulated crypto-assets. Market infrastructures seeking to trade financial instruments in crypto-asset form will operate under a pilot regime. For previously unregulated crypto-assets, including stablecoins, the proposal introduces stringent requirements for issuers and service providers, including capital requirements, custody of assets, investor protection, and rights against issuers.
The legislative proposal for an EU regulatory framework on digital operational resilience focuses on mitigating cyber threats. It requires all firms in the financial sector to withstand ICT-related disruptions and threats, setting strict standards for banks, stock exchanges, clearinghouses, fintechs, and cloud service providers.
Finally, the renewed strategy for modern and safe retail payments aims to foster innovation in the European payments market, enhance consumer protection, ensure safety, and reduce reliance on global payment giants.
Source: https://finance.ec.europa.eu/publications/digital-finance-package_en