Wednesday, September 30, 2020

Coronavirus opens opportunity to unify Europe's digital payments market



Key facts:
The European Union asks companies to take extreme security measures against cyber attacks.
Authorities will channel government funding to fintech startups.
                                                   
The coronavirus pandemic has demonstrated the importance of digital media in the face of mandatory confinement. In this context, only in Europe, the use of electronic payments increased 73% in one week, according to calculations by the European Union (EU). However, although financial technologies have facilitated the transmission of payments and reduced possible contagions, the European Union affirms that its consumers are exposed to an unregulated market.

These are the conclusions of the most recent financial strategy of the European Commission, which seeks to promote the regulation of telecommunications companies (ICT), digital banking and cryptocurrencies. And, which in the near future, could become the new regulatory regime for those exchanges, wallets and issuers of crypto assets that offer their services in much of Europe.

The organization detailed in its report that the current situation generated by the coronavirus has opened a possibility to "avoid the fragmentation of the European financial market." In this way, they plan to turn Europe into a territory for the development of financial technologies (Fintech), promoting the use of cryptocurrencies and digital platforms for cross-border payments.

users-cryptocurrencies-Europe-passport-companies-individuals
The cryptocurrency passport will serve both businesses and consumers in the European Union, the statement said. Source: European Commission.
In this sense, there has been talk of granting a digital identity to companies that work in the cryptocurrency sector and are authorized to provide their services. As CriptoNoticias has previously reported, this document will be known as a "cryptocurrency passport" and will allow companies in this ecosystem to work in the 27 countries of the European Union.

The European Commission points out that this passport could be used to introduce a comprehensive law that protects consumers and regulates these new markets. The authorities have proposed a pilot regulatory regime for the market to test these new regulations and make relevant changes if any of these laws hinder their proper development.

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In this way, the entire territory will have access to the possibility of making cross-border payments and even sending remittances to nations outside the continent. The organization also hopes that with a more unified market, financing can be better channeled to small and medium-sized enterprises (SMEs) in the financial technology sector.

The organization detailed in its report that the current situation generated by the coronavirus has opened a possibility to "avoid the fragmentation of the European financial market." In this way, they plan to turn Europe into a territory for the development of financial technologies (Fintech), promoting the use of cryptocurrencies and digital platforms for cross-border payments.

In this sense, there has been talk of granting a digital identity to companies that work in the cryptocurrency sector and are authorized to provide their services. As CriptoNoticias has previously reported, this document will be known as a "cryptocurrency passport" and will allow companies in this ecosystem to work in the 27 countries of the European Union.

The European Commission points out that this passport could be used to introduce a comprehensive law that protects consumers and regulates these new markets. The authorities have proposed a pilot regulatory regime for the market to test these new regulations and make relevant changes if any of these laws hinder their proper development.

In this way, the entire territory will have access to the possibility of making cross-border payments and even sending remittances to nations outside the continent. The organization also hopes that with a more unified market, financing can be better channeled to small and medium-sized enterprises (SMEs) in the financial technology sector.

The European Union is concerned about cyber attacks

A point of great importance in the regulatory proposal of the European Commission is the need to increase the operational resilience of digital payment platforms. In this sense, the organization is requiring companies that provide telecommunications services or share personal data to increase their security levels.

The European Union reported that, in the last months of the coronavirus crisis, cyber attacks on financial institutions increased by 38%. Because of this, if Europe wants to lead a transition towards increasingly digital payments, it must have a robust infrastructure that prevents theft of money by hackers.