The European Union (EU) will release a new set of rules by 2024 to help streamline cross-border payments by using blockchain technology and cryptoassets.
Two EU documents show that the EU is planning to introduce new rules within four years to make cross-border payments quicker and cheaper through the use of blockchain and crypto assets like stablecoins.
Reuters had access to those documents and stated that: “The European Commission is due to set out its strategy for encouraging greater use of digital finance at a time when 78% of payments in the euro zone are in cash. It also wants a rapid shift to “instant” payments generally as pandemic lockdowns showed the growing role of cashless payments.”
Therefore, the EU executive will present a draft law to clarify how existing rules apply to crypto assets and set out new rules where there are gaps, the documents said. The document also said that the European Commission – the EU’s executive branch – would release a draft law to explain how the existing regulatory framework will be put into action, and how new regulations will be introduced as needed.
“By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector,” the documents said. “It should also address the risks associated with these technologies.”
The move towards wider cryptoasset adoption is part of a broader effort to encourage a shift towards digital finance, especially at a time when the pandemic has boosted the notion of a cashless society, numerous reports said.
Especifically, the EU would be looking at one type of cryptocurrencies: stablecoins. Stablecoins, a type of cryptocurrency often backed by traditional assets, leapt onto policymakers’ agendas last year when Facebook revealed plans for its Libra token. Central banks are now studying whether to launch their own.
Brussels also wants to make it easier to share data within the financial sector to encourage competition and a wider range of services, while upholding the principle of “same risk, same rules, same regulation”, the documents say.
The bloc should also have rules in place within four years to allow new customers to start using financial services quickly once anti-money laundering and identity checks have been completed, it said.
The news comes a week after a senior official at the EU’s executive branch addressed the topic of EU finance ministers — from Germany and France — asking for tighter controls on stablecoin issuers as The Block previously reported.