The Vice-President of the European Commission Valdis Dombrovskis has stated that the future of finance lies in digital technologies and spoke about plans to create a regulatory sandbox for companies to test their blockchain projects.
The European Commission has presented the rules for the regulation of cryptocurrencies and stablecoins, as announced by its vice-chairman Valdis Dombrovskis in an official press release. He explained that the digital assets have become increasingly popular, and therefore it is important to give companies the opportunity to use its benefits, but at the same time reduce risks for investors and maintain the stability of the financial system.
The European Commission is also planning to create a regulatory sandbox where firms can test smart contracts and blockchain-based products. Together with improved regulations, this will help develop better financial products and open new funding channels.
“The Commission aims to stimulate innovation in the EU financial sector, in particular for fintech digital startups, while tackling any potential risks,” Dombrovskis said.
He stressed that there will be more stringent requirements for stablecoins like Facebook’s Libra project. This is due to the potentially huge scale that such cryptocurrencies can achieve in terms of user reach, it can threaten financial stability. For this reason, it is important to implement reliable security measures, including fraud and money laundering.
Dombrovskis added that the future of finance lies in digital technologies. The process of digitalization of the economy accelerated, as during the quarantine, people began to use banking and other financial services via the Internet, and the share of contactless payments increased.
In December 2019, the European Union did not permit the use of stablecoins, such as Libra, on its territory. The EU Council than reiterated that the legalization of use cryptocurrencies of this kind is possible only after the designation and eradication of any legal and supervisory risks.
