By Huw Jones
LONDON (Reuters) – The European Union will introduce new guidelines inside 4 years to make cross-border funds faster and cheaper by way of using blockchain and crypto belongings like stablecoins, two EU paperwork confirmed.
The European Fee is because of set out its technique for encouraging larger use of digital finance at a time when 78% of funds within the euro zone are in cash. It additionally needs a speedy shift to “prompt” funds usually as pandemic lockdowns confirmed the rising function of cashless funds.
The EU govt will current a draft regulation to make clear how present guidelines apply to crypto belongings and set out new guidelines the place there are gaps, the paperwork mentioned.
“By 2024, the EU ought to put in place a complete framework enabling the uptake of distributed ledger expertise (DLT) and crypto-assets within the monetary sector,” the paperwork mentioned. “It must also tackle the dangers related to these applied sciences.”
Stablecoins, a kind of cryptocurrency typically backed by conventional belongings, leapt onto policymakers’ agendas final 12 months when Fb revealed plans for its Libra token. Central banks at the moment are learning whether or not to launch their very own.
Brussels additionally needs to make it simpler to share information throughout the monetary sector to encourage competitors and a wider vary of companies, whereas upholding the precept of “similar danger, similar guidelines, similar regulation”, the paperwork say.
The bloc must also have guidelines in place inside 4 years to permit new clients to start out utilizing monetary companies rapidly as soon as anti-money laundering and identification checks have been accomplished, it mentioned.
“By 2024, the precept of passporting and a one-stop store licensing ought to apply in all areas which maintain sturdy potential for digital finance,” it mentioned. Instantaneous fee programs ought to turn out to be the “new regular” by the tip of 2021.
Instantaneous funds are appropriate for a lot of makes use of past conventional credit score transfers, particularly for bodily and on-line purchases, that are presently dominated by fee card schemes, the paperwork mentioned.
Europe has lengthy sought “residence grown” alternate options to the likes of MasterCard and Visa, the U.S. funds companies closely used within the area.
The Fee will assess the affect of prices levied on customers for fast funds and to might require that they’re no greater than these for normal credit score transfers.
(Reporting by Huw Jones, Modifying by William Maclean)