EU Executive Vice-President Valdis Dombrovskis explained the future of digital assets and the EU approach in a speech last week
The European Union is preparing to publish a strategy for digital finance later this year. The strategy should enable countries to get the most out of digital finance by removing regulatory barriers. This is what EU executive vice-president Valdis Dombrovskis indicated.
Speaking at the Alliance’s Digital Finance Outreach 2020, the Alliance’s leading economics minister said the EU was considering new regulatory frameworks for cryptocurrencies that could include a stricter framework for global stable coins.
The EU executive vice-president of the European Commission for an economy that works for people, said the pandemic had shown how much we depend on digitisation to keep things going. „Once the crisis is over, I would not expect the process of introducing digitisation to slow down,“ he said. That is why the EU wants to ensure that Europe is ready to compete globally and make the most of digital opportunities. This will help create new jobs and boost economic growth when the world recovers from the pandemic, he added.
He then outlined the three priorities for the EU: removing barriers to scaling, promoting a data-driven financial sector and encouraging innovation while maintaining technology neutrality.
„Crypto-assets and distributed ledger technology will be our first test case,“ Dombrovskis said. He then acknowledged the contribution of crypto-assets to development: „They have the potential to bring benefits to consumers, businesses and market participants.
According to Dombrovskis, lack of legal certainty is one of the growing obstacles to the development of a large EU crypto market. That is why the EU is pursuing a common approach to support and stimulate innovation, the opinion states. The legislation demonstrating this approach can be expected later this year, he said.
The legislation aims to review several areas of regulation for crypto assets already covered. The aim is to ensure that they „remain appropriate“, Dombrovskis said. For those crypto-assets not yet covered by the present rules, the rules will be set in proportion to the level of risk of the project. „The aim is to ensure that risks are addressed and investors and users have a clear understanding of them,“ the EU representative clarified.
The EU wants to distinguish between global Stablecoins and those created by smaller start-ups and FinTech innovators. Global Stablecoins are likely to have stricter standards due to the additional monetary policy challenges, Dombrovskis said. „In these cases, our rules will be stricter because of their potentially systemic role,“ he said.