- European Commission (EC) on 24th September has adopted a digital finance package
- The proposal submitted by EC focused on stablecoins to a more considerable extent
European Commission (EC) on 24th September has adopted a digital finance package. This package includes legislative proposals for crypto-assets, digital financial strategy, and digital resilience. This package will bring Europe another step closer to creating a legal structure of regulations for digital finance. The package is currently under consideration and yet to be approved by the European Parliament and the European Council, the EC’s legislative counterparts.
Executive Vice President of EC, Valdis Dombrovskis, commented that the future is digital and the migration of people towards fintech solutions and online banking during the pandemic is the live proof of the same. He believes that a single digital market that is innovative will lead Europe on the way of financial and economic recovery. And will simultaneously provide new funding channels to the companies.
Focus on Stablecoins
The proposal submitted by EC focused on stablecoins to a more considerable extent. Stablecoins are simply another cryptocurrency backed by an asset like the United States dollar or sometimes an algorithm. ECbelieves that investors’ rights, supervision regulations, and the law for capital shall be stringent.
Crypto asset issuers post this plan’s implication will be required to publish a white paper consisting of mandatory displacement requirements mandatorily. Small and medium scale enterprises offering lesser than $1.1 million of assets yearly are exempted from the law. Officials from EC commented that the exclusions are made factoring the risks created by those enterprises.
Legislative Proposal for Crypto Assets
According to EC, crypto-assets except those regulated by EU legislation shall also be put under the EU. For this, a pilot regime program is proposed for trade using crypt assets. This will help the EU develop a market framework, and participants from the pilot run will gain experience through DLTs exchanges. EC with the package aims to channel the funding towards businesses of Europe. As per them, it will also make the rules safer and digital-friendly for the users. EC further commented that this would also boost innovations in the EU’s financial sector and the digital start-up industry.
Recently OCC and SEC of the United States have also published a press release regarding clarifications of the stablecoins. The SEC mentioned that the term ‘stablecoin’ is misleading and shall replace something much less misguiding.