As it is that time in the political mandate of the EU institutions when proposals have to be put forward in order to be adopted before the end of the mandate (Q2 2024), together with its Capital markets Union action plan, the European Commission adopted on 24 September 2020 the Digital Finance Package. This package is aimed at giving consumers more choices and opportunities in financial services and modern payments, while ensuring consumer protection and financial stability.
The package which is part of the wider digital agenda of the European Commission includes two strategies, namely the Digital Finance Strategy and the Retail Payments Strategy, and legislative proposals on crypto-assets and digital resilience. Out of the three priorities of the European Commission for financial services, we now have two, the missing part being the Renewed Sustainable finance action plan, which we should be able to read in the next few months.
The Digital Finance Strategy
The Digital Finance Strategy is rather broad and foresees four main priorities for the digital transformation of the EU financial sector namely:
- to reduce fragmentation in the Digital Single Market for financial services;
- to make EU financial services rules fit for the digital age, ensuring that the EU regulatory framework facilitates digital innovation;
- to create a European financial data space to promote a data driven innovation in line with the Commission’s Data Strategy;
- to promote financial digital innovation while mitigating its risks.
In this strategy, the European Commission is considering, concrete measures such as digital identity tools (e-IDAS), interoperation digital identity solutions, open finance based on the PSD2 model (as mentioned in the broader Digital Strategy), strategy on supervisory data, passporting and one-stop shop licensing, a legislative framework on Artificial Intelligence applications, and a legal framework on DLT and Crypto-assets.
The Retail Payments Strategy
The Retail Payment strategy aims at achieving a fully integrated retail payments system in the EU, which will facilitate payments in euro between the EU and other jurisdictions and will provide EU citizens and businesses with a broad range of high-quality payment solutions. The strategy focuses very much on the review of PSD2 and SEPA as well as instant payments.
As mentioned earlier, for the actions set out in the strategies most proposals will be presented in the next 24 months for them to be adopted in time for the end of the political mandate. As for the proposals already on the tables, the co-legislators i.e. the European Parliament and the Council are starting their work to amend them. The ABBL is following with great interest all the new development and contributing to the discussions.
DLT and Crypto-assets
Regarding the DLT and Crypto-assets, the European Commission has already published on 24th October its legislative proposals.
In order to mitigate the risk of digital activities the European Commission also put on the table a proposal on digital operational resilience. Which proposes that banks, stock exchanges, clearinghouses, as well as fintechs, will have to respect strict standards to prevent and limit the impact of ICT-related incidents.
By Aurélie Cassou
At the ABBL, the Digital, Innovation & Payments team is actively working together with members to define and defend a common position with regard to MiCA (Markets in Crypto-assets), pilot regime for DLT (Distributed-Ledger-Technology) and DORA (digital operational resilience) at national and European level.