European Commission Sets out EU Digital Finance Strategy
09/24/2020The European Commission has published a Communication on its EU digital finance strategy for the coming years. The global economy has been transformed by digital innovation, and this includes financial services. The Commission's strategic objective is to embrace digital finance for the benefit of consumers and businesses while ensuring digital transformation is soundly regulated. To achieve this objective, the Commission sets out four priorities for the digital transformation of the EU financial sector over the next four years and the actions it will take to achieve them. The priorities are:
- Tackle fragmentation in the EU digital financial services market by allowing firms to scale up across borders, enabling them to access cross-border funding and provide genuine cross-border access to consumers. Actions will include greater harmonization of anti-money laundering and counter-terrorism financing rules and passporting regimes, as well as an EU digital finance platform to encourage cooperation between private and public bodies.
- Ensure the EU regulatory framework facilitates digital innovation while ensuring it is used in a responsible way. Actions will include new EU legislative frameworks on key aspects of digital finance, such as crypto-assets and regular guidance on the interpretation of the EU regulatory framework in the context of new and emerging technologies.
- Create an EU financial data space which would provide enhanced access to data (such as financial and non-financial information on operations and products) published by financial firms. Actions will include establishing an EU-funded infrastructure for public disclosures and a legislative proposal for a new open finance framework.
- Address new challenges and risks associated with the digital transformation, including the possibility of regulatory loopholes which do not yet cover the digitalization of financial services. Actions include the Commission's new proposed EU framework for strengthening operational resilience, published on the same date as the Digital Finance Strategy Communication.
The Commission has published a Q&A on the Digital Finance Strategy. It has also published a summary of the responses it received to its consultation on the proposed Digital Finance Strategy, which ran between April 3, 2020 and June 26, 2020. The consultation opened at the same time as the coronavirus pandemic was building in Europe. However, the Commission decided to go ahead with the consultation because it believed digital finance could help tackle issues arising as a result of the pandemic.
The Commission has simultaneously published a series of proposed Regulations on various aspects of digital finance, including crypto-assets, digital operational resilience and distributed ledger technology as well as a Directive amending certain related pieces of EU financial services legislation. It has also published a separate Communication to EU bodies on its EU retail payments strategy, which is relevant to the Digital Finance Strategy given the importance of digital payments to the EU financial and payments services sectors.
View the Commission's EU Digital Finance Strategy.
View the Commission's Q&A on the Digital Finance Strategy.
View the responses to the Commission's consultation.
View details of the Commission's consultation on its Digital Finance Strategy.