Pending concrete proposals from the European Commission, the European Parliament launched its own reflection on digital finance (‘FinTech’) on Thursday 4 June, with the publication of the draft own-initiative report by the Czech MEP Ondřej Kovařík (Renew Europe), which makes several recommendations.
Indeed, the European Commission confirmed in its revised work programme (see EUROPE 12493/25) that it would present, in the third quarter of 2020, an action plan on FinTech accompanied by a legislative proposal on crypto-assets and cyber-resilience of financial services.
In general, the draft report calls on the Commission to adopt “a proportionate, cross-sectorial and holistic approach to its work on FinTech”. It further notes that “digital finance can contribute in a number of ways to tackling the economic effects of the Covid-19 outbreak as regards consequences for citizens, SMEs and other businesses and financial services”.
The rapporteur identifies three areas in particular that require a pan-European regulatory response: crypto-assets, data access and the cyber-resilience of financial services.
A taxonomy on crypto-assets
The draft text asks the Commission to consider how to develop a taxonomy on crypto-assets, “a common definition being the most appropriate starting point”, according to Mr Kovařík. It would also strengthen collaboration between different jurisdictions and provide legal certainty for market operators, he points out. However, the text specifies that any taxonomy should be “open”, given the rapid evolution of crypto-assets.
The rapporteur is also in favour of a legislative proposal for crypto-assets that provides legal certainty while guaranteeing consumer and investor protection and always according to the principle “same activity, same risks, same rules”.
It will, in his view, be necessary to create tailored regulatory regimes for evolving crypto-assets activities, such as Initial Coin Offering (ICO).
Facilitating financial inclusion
The draft report also stresses that “data treatment is a key part of FinTech, making it necessary to include consistent, technology-neutral measures aiming to ensure an adequate treatment of data in the financial sector”.
Furthermore he invites the Commission to study the possibility of introducing a framework for digital onboarding and for the use of digital identities in the financial sector in order to facilitate financial inclusion and the cross-border provision of financial services within the single market.
A common approach to cyber-resilience
Finally, the text supports the need for a legislative proposal on the cyber-resilience of the financial sector, stressing that financial institutions are increasingly exposed to the risks of internal failures or external cyber-attacks.
“This framework should aim to modernise and harmonise current rules while focusing on concerns related to the financial sector”, he said.
See the report: https://bit.ly/2XyyCOK (Original version in French by Marion Fontana)