The European Commission (EC), the executive arm of the European Union, has unveiled a new FinTech action plan designed to help harness the opportunities made available by new technologies like blockchain.
In a document titled “FinTech Action plan: For a more competitive and innovative European financial sector,” the EC said that it is planning to form a new FinTech Lab in the second quarter of 2018. The FinTech Lab will allow European and national authorities to engage with tech firms in a “neutral, non-commercial space.”
“The Commission will establish an EU FinTech Lab to raise the level of regulatory and supervisory capacity and knowledge about new technologies,” the EC said. “It will do this through demonstrations and expert discussion in a non-commercial, neutral financial technology laboratory. The Lab will bring together multiple vendors, in particular from the EU, with regulators and supervisors so they can raise and discuss regulatory and supervisory concerns.”
Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union, said to compete globally, Europe’s innovative companies need access to capital, space to experiment and scale to grow.
“An EU crowdfunding license would help crowdfunding platforms scale up in Europe,” said Dombrovskis. “It will help them match investors and companies from all over the EU, giving more opportunities for firms and entrepreneurs to pitch their ideas to a wider base of funders.”
The commission said it has already created an EU Blockchain Observatory and Forum. It will report on the challenges and opportunities of crypto assets later in 2018. It is also working on a comprehensive strategy on distributed ledger technology (DLT) and blockchain addressing all sectors of the economy.
Mariya Gabriel, Commissioner for the Digital Economy and Society, said digital technologies have an impact on our whole economy – citizens and businesses alike.
“Technologies like blockchain can be game changers for financial services and beyond,” said Gabriel. “We need to build an enabling framework to let innovation flourish, while managing risks and protecting consumers.”
The commission also said that it has fostered a relationship with the International Organization for Standardization’s Technical Committee 307, which is establishing global blockchain standards. The EC acknowledged concerns about whether blockchain technology and its accompanying innovations could be hampered by existing rules.
The EC will present a blueprint with best practices on regulatory sandboxes, based on guidance from European Supervisory Authorities. A regulatory sandbox is a framework set up by regulators that allows FinTech startups and other innovators to conduct live experiments in a controlled environment, under a regulator’s supervision. Regulatory sandboxes are gaining popularity, mostly in developed financial markets.
Currently, the EU has already revised its Payment Services Directive since January this year, which requires banks in the region to open up their communication channels, such as API, to blockchain applications that require payment account integrations.
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