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Given the recent statement on digital finance delivered by the VP of the EU Commission, digital asset regulation in the EU is slated to undergo major changes. What it means is that starting a cryptocurrency business in Europe will now require keeping in mind a new regulatory regime for digital assets. 

So, let’s have a closer look at what may await digital entrepreneurs in this regard.  

What Does It Mean?

To make things easier for potential investors, the EU Commission is launching a consultation on e-financing. Some of the key areas it will be covering include:

  • providing incentives for provision of innovative financial e-services;
  • ensuring regulatory neutrality with regards to technology & innovation;
  • challenges involved in regulation of fintech companies in the EU;
  • open banking & financial activities related to data processing;
  • increasing the EU financial system’s stability.

Some of the main objectives of the consultation include:

Ensuring Compliance with Regulatory Framework

Since the commencement of cryptocurrency activities in Europe, the current regulatory framework for virtual assets in the EU has been repeatedly called into question. Therefore, for certain types of cryptoassets that aren’t governed by the current legislation, the Commission will be proposing introducing an individual regime.

Introducing Stricter Rules for High-Risk Cryptoassets

In his statement, the VP of the EU Commission has touched upon the regulation of stablecoins in Europe. In particular, he stressed the need for making a regulatory distinction between stablecoins issued by major players & those issued by small-sized fintech companies incorporated in Holland or elsewhere. That will enable the regulators to offset systemic risks posed by the former

Improving Digital Resilience of the EU Fiscal System

It is expected that the Commission’s next step will be to strengthen cybersecurity rules by putting in place new criteria for regulation of financial institutions in the EU.
 

IMPORTANT

The results of the consultation will be reflected in the Commission's Digital Strategy which is expected to be published in the 3rd quarter of 2020.

Still have questions regarding the topic of this article? Why not sign up for an individual consultation on the regulation of cryptoassets in the EU? Our legal assistants are always on standby to give you a hand with registering a fintech company in Germany, France or Luxembourg.