EU Said to Plan Legislation in Support of Fintech Sector
According to a document seen by Reuters, the EU wants to standardize the fintech sector and encourage its development.
The European Commission (EC) will put forward a draft law on crowdfunding and propose a set of standards for blockchain technology with a view to supporting the fintech industry, Reuters reports, citing an EU document it has seen.
The EU executive body may publish its draft framework by the end of the week, according to the news agency. With the UK on its way out of the bloc, the EC aims to prepare for the significant gap this exit will leave in the fintech sector. Given the strong connection between the industry and the emerging blockchain technology, Brussels needs to guarantee that growing demand for skilled workers will be met through qualified specialists in an organized market.
The new law will propose a licensing system so that startups could raise capital through crowfunding platforms with far greater ease.
“An EU framework would offer a European passport, and, at the same time, ensure the proper management of platforms and the protection of fund providers,” the document says.
It also points out that startups would avoid dealing with the mishmash of regulatory requirements that are currently a necessity.
The EC will examine existing financial regulations to assess their compatibility with initial coin offerings (ICOs) and cryptocurrencies.
In addition, the executive agency will step up its effort to support blockchain technology via open standards. The document says:
“An EU-wide fintech market will not reach its full potential without the development of open standards that make interoperability possible, simplify the exchange of data between market players and facilitate competition.”
By the end of 2018, the EC plans to come up with a “blueprint” for regulatory “sandboxes,” which some regulators currently offer to fintech companies to trial new apps on real users. The blueprint will include guidelines for building innovation hubs.
As we previously reported, the EU has allocated about 340 million euro for blockchain projects for the period 2018-2020.