Debate: Digital Finance: emerging risks in crypto-assets - regulatory and supervisory challenges in the area of financial services, institutions and markets - Further development of the Capital Markets Union : improving access to capital market finance, in particular by SMEs, and further enabling retail investor participation
Date: WEDNESDAY, 7 OCTOBER 2020
Speaker: Ondřej Kovařík
Country: Finland
Language: EN

The infrastructure behind this depends on a model based on providing security for businesses, investors and customers. This is a key part of what the report on digital finance is about. Consider your favourite microbrewery, which is a business operating fully offline, relying on clients coming inside to make purchases. With the pandemic and the fight to sink or swim, many moved online to offer their specialty craft beers via online platforms. From one day to the next, they tapped into e-commerce and could explore new possibilities for funding or reach out to new promising markets.  Digital finance, and particularly online banking, shopping and payments, can simplify the financial life of our citizens and of our businesses, from small to large. It’s clear that the pandemic has accelerated a trend we had already been seeing in digital finance. This report addresses a number of these trends and suggests appropriate measures to ensure that the EU framework is fit for a digital age in the area of financial services. The report on digital finance is a legislative initiative report, which is a relatively underused tool in Parliament, but, in our case, we were already working closely with the Commission. I welcome the two concrete frameworks proposed on 24 September by the College on cryptosets, digital operational resilience and other digital finance-related issues. On crypto-assets, the report calls for a framework which is future facing and adaptable to changes that are steadily coming in the near future. The report foresees an open-ended taxonomy to categorise different crypto-assets. The report also calls for a proposal for a legislative framework for stablecoins, whether they be public or private stablecoins, to ensure they meet at least the standards set out in the E-Money Directive. Furthermore, we must ensure that in any legislation there is a stable conversion rate between stablecoin and fiat currencies and the respective stablecoin is reconvertible into fiat currency at par value at any time. For all crypto-assets, the overarching aim is for more transparency, integrity and accountability, and also their full compliance with the existing and future AML framework. On operational resilience, the report asks for a legislative framework that applies consistency and strengthens the ICT and cybersecurity in a harmonised manner across the EU. EU businesses are currently very reliant on third countries’ ICT providers, particularly cloud services. Without access to those providers, the capacity for EU businesses to grow would be diminished. I believe we must work closely with the big tech companies providing these services, ensuring that, when providing services to EU clients, they do apply EU legislation in good faith.  Finally, the report also calls for a framework on digital onboarding, which would lead to harmonisation across the single market of key aspects of digital finance, such as digital financial identities and data sharing fully in line with data protection provisions. There are other aspects of the report, which include a strong call to improve AML provisions, central bank digital currencies, the issue of supervision and the single EU supervision in different aspects of digital finance and, crucially, the question of financial redress. Together with a team of shadows, which I would like to thank here, we are able to present the Parliament today with a report that offers a holistic, thorough and sensible approach to questions that the EU will have to answer on digital finances in the coming years.