EU regulators recognise the power of blockchain technologies and are welcoming of the innovative efforts of those seeking to provide blockchain solutions across Europe.
The EU also aims to develop a competitive and innovative financial services sector and published its Fintech Action Plan on 8 March 2018.
The EU’s Financial Services Regulation Timeline:
Since Q1 2018 - the European Commission has been monitoring crypto-asset developments, including ICOs, to determine whether EU regulatory action is required.
In Q2 2018 - the commission was to consider implementing the European Financial Transparency Gateway based on distributed ledger technology (DLT). It also hosted an EU FinTech Lab, where EU and national authorities could engage with technology innovators in a neutral, non-commercial space.
By Q4 2018 - the Fintech Action Plan called on European supervisory authorities to identify best practices for fintech companies and, where appropriate, issue guidelines; and for fintech standards to be set in a coordinated way. Major standard-setting bodies such as the European Committee for Standardisation and the Intentional Organisation for Standardisation were to be involved.
By Q1 2019 - the European Commission was to present a report on best practices for regulatory sandboxes and set up an expert group to assess any unjustified regulatory obstacles to financial services innovations.
Those in the DLT business were encouraged by the EU to develop by mid-2019 standardised APIs that are compliant with the Payment Services Directive and the GDPR.
It's clear that the EU does not think there is a strong case for a major overhaul of financial services regulation. However, it does want to ensure that there are no regulatory barriers to innovation that might stymie competitive efforts by EU entities. Ensuring adequate consumer protection is part of the plan to stay competitive.
For all questions regarding the topics raised in this blog, please contact a member of our team of digital asset legal experts.