ECB Brings Crypto Assets and Digital Wallets in Extended Framework
The European Central Bank has released an extensive regulatory framework that will cover digital assets like cryptos as well as digital wallets as it prepares to put in place regulations in line with the times we live in.
Most of the regulatory framework in most countries was put in place a few years ago, but over the past couple of years we have seen major changes in the way payments and the financial sector work. We have seen the proliferation of many digital wallets as many new and old businesses move into the digital age and seek to make payments easier for their users. We have also seen the growth of the crypto and digital asset industry and they have also spread across the world without much regulatory oversight. Now they are in a position to challenge and change the existing financial ecosystem and that is why regulators have woken up and started to take notice and realize that they should rule the industry and put update their regulatory framework to cope with the changing scenario.
âThe retail payments ecosystem is changing rapidly due to innovation and technological change. This requires a forward-looking approach in the supervision of digital payment solutions, âsaid Fabio Panetta, member of the ECB’s executive board. âThe PISA framework will include digital payment tokens such as stablecoins, as well as traditional payment instruments and schemes in which we have gained experience over the years. Coordinated action at the international level will also need to be strengthened to address the challenges posed by global digital payment solutions and stablecoins. “
It is expected that the ECB will also come up with a specific framework to cover crypto assets, but that should happen a few months later as it is still ongoing, but the current framework is expected to complement it. The ECB hopes this will help to further regulate the crypto industry by bringing more transparency and also making it easier for large investors to dive into this space with more confidence, which will create a win-win situation for all. Companies that would be regulated by the ECB and placed in this framework will likely be given a period of one year to comply with the regulations.