This week in crypto policy news, the European Parliament introduced Financial Data Access (FIDA).
The European Council and Parliament made progress in establishing the future European authority for countering money laundering and terrorist financing (AMLA).
China recognized the significance of Web3, indicating a major shift in its stance towards digital assets.
Australian Treasury consults on payment service providers licensing framework.
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Before going into the year-end recess, the European Parliament published a draft report on a framework for Financial Data Access (FIDA). It has been decided that the Members of European Parliament (MEPs) will get until January 30 to propose amendments to a proposal designed to give users more control over the sharing of their financial data.
According to the Commission, “Customers of financial institutions, both consumers and firms, should have effective control over their financial data and the opportunity to benefit from open, fair, and safe data-driven innovation in the financial sector. Those customers should be empowered to decide how and by whom their financial data is used and should have the option to grant firms access to their data for the purposes of obtaining financial and information services should they wish.”
On the Council side, the Spanish presidency published progress reports on a digital Europe and on FIDA, in which it ensured that during the whole semester, any decision or debate on the euro cash or on a possible digital euro, will go through a rigorous democratic scrutiny.
Meanwhile, Europe’s ECOFIN Council, responsible for economic policy, taxation issues and the regulation of financial services, endorsed both a digital Europe and FIDA. ECOFIN meets every month and brings together economic and financial ministers from all EU member countries.
Selection Process for AMLA’s Headquarters Underway
The European Council and Parliament have made significant progress in establishing the future European authority for countering money laundering and terrorist financing (AMLA), agreeing on a transparent and equitable process for selecting its headquarters. AMLA, central to the EU’s anti-money laundering reforms, will possess both direct and indirect supervisory powers, including the authority to impose sanctions and measures. This decision follows a recent political agreement on AMLA’s design, including its tasks, powers, and governance. Nine EU member states, namely Belgium, Germany, Ireland, Spain, France, Italy, Latvia, Lithuania, and Austria, have submitted bids to host AMLA. The European Commission is responsible for evaluating these candidacies, with an assessment expected by January 2024. The final selection of the location, to be integrated into the regulation, marks a crucial step in fortifying the EU’s stance against financial crimes.
EPI Achieves Milestone in European Instant Payment Transactions
The first transaction, a 10-euro transfer, exemplified the speed and efficiency of wero, highlighting the collaborative efforts of both banking teams. This demonstrates EPI’s advancements in creating a unified account-to-account payment system based on SCT Inst and its digital wallet.
Commenting on the first instant payment transactions in Europe, EPI’s CEO Martina Weimert said, “Today marks a significant achievement for EPI and for the European payments landscape as a whole. The successful execution of our first account-to-account instant payment transactions with wero demonstrates our capacity to deliver value and innovation to consumers and merchants in Europe.”
“We have now launched our concrete journey of delivering all kind of payment use cases and related services to the market and are moving towards our goal of changing the way Europe pays,” Weimert added.
Furthermore, Yves Tyrode, CEO Digital & Payments of Groupe BPCE said, “As fervent promoters of a unified instant payment solution for Europe, our contribution to bringing the first transactions to life was obvious to us. It also illustrates our ambition to integrate the EPI solution, wero, into the mobile banking apps of Banque Populaire and Caisse d’Epargne in order to continue to bring ever greater value to their customers.”
APAC: Australia, Korea and China
Australian Treasury Consults on Payment Service Providers Licensing Framework
Next in crypto news, the Australian Treasury released a consultation paper detailing its regulatory framework for stablecoins, proposing that stablecoin be regulated under the same stored value facility (SVF) framework as other fiat-based payment facilities. This framework is designed to update and improve the regulation of payment services, making it more fit-for purpose and activity-based. Following the initial consultation in June 2023, which focused on payment functions requiring licensing, this second paper offers an expanded list of payment functions and integrates the framework within the broader Australian Financial Services system.
Key aspects of the proposed framework include regulatory requirements to enhance access to payment systems, tailored regulations for stored-value facilities including payment stablecoins, establishment of industry standard-setting, and the introduction of a new rule-making power for a mandatory updated ePayments code to bolster consumer protections. The Treasury seeks feedback from interested parties on these proposals, outlining specific consultation questions in the document. This step represents a significant move towards modernizing the regulatory landscape of payment services in Australia.
FSC Korea Announces New Regulations for Virtual Asset Protection
Korea’s Financial Services Commission (FSC) has introduced a comprehensive set of rules under the Act on the Protection of Virtual Asset Users, scheduled for implementation on 19 July 2024. This initiative is geared towards enhancing the security and integrity of virtual asset transactions. The rules define the range of virtual assets covered and mandate virtual asset service providers (VASPs) to securely manage and segregate customer funds. Notable, the rules exclude certain tokens, including electronic bonds and NFTs, from the Act’s purview.
According to FSC, VASPs are required to store a minimum of 80% of customer’s virtual assets in cold wallets, exceeding the previous 70% requirement. A significant focus is on ensuring financial safeguards through mandatory liability insurance or reserves for VASPs, covering potential incidents like hacking. The rules also clarify the timeline for public disclosure of information, directly impacting insider trading regulations in virtual asset markets. Furthermore, VASPs are restricted from arbitrarily blocking user transactions, except under specific circumstances aimed at user protection. Lastly, the proposal places an obligation on VASPs to monitor and report suspicious or abnormal transactions, with defined procedures for imposing fines on unfair practices. These proposed rules, open for public commentary until January 22, 2024, represent a major step forward in protecting virtual asset users and establishing a more regulated and secure digital asset marketplace.
China’s Ministry of Science and Technology Focuses on Web3 and NFT Development
China’s Ministry of Science and Technology is set to release a comprehensive Web3 strategy document, outlining a clear path for the industry’s development, including NFTs and distributed applications (dApps). Despite the existing crypto news on the ban of digital assets, the Ministry recognizes the significance of Web3, indicating a major shift in its stance towards digital assets. This strategy aims to address various aspects such as innovation, security, governmental roles. This strategy aims to address various aspects such as innovation, security, governmental roles, and the legacy of current systems. Collaborating with the Chinese Academy of Sciences and the China Association for Science and Technology, the Ministry plans to enhance inter-departmental cooperation to boost Web3 innovation, conduct extensive research, and bolster industry talent.
Prior initiatives include policy documents like the “Guiding Opinions on Accelerating the Application of Blockchain Technology and Industrial Development” and actions in sectors like energy, law, and trade finance. The forthcoming strategy will emphasize government and industrial applications of Web3, advocating for new business models like NFTs and encouraging the rapid application of Web3 technologies to foster a robust digital ecosystem. This move by China marks a significant step towards embracing the potential of Web3 and digital innovation.
Thanks for joining our crypto policy news roundup this year – we can all agree this space is moving faster than ever. Let’s hope the US can catch up in 2024.