The European Commission has adopted a new Digital Finance Package, which aims to improve the competitiveness and innovation of the financial sector.
The new initiative includes digital finance and retail payments strategies, as well as legislative proposals on crypto-assets and digital resilience.
Its goal is to offer consumers more choice and opportunities in financial services and modern payments, while maintaining consumer protection and financial stability.
These measures are also being seen as crucial to supporting the EU’s economic recovery, as it explores ways of channelling funding to Europe’s businesses, while delivering on the European Green Deal and the New Industrial Strategy for Europe.
The changes will reduce market fragmentation in the digital single market so that consumers can access financial products across borders and that FinTech startups can scale and grow. It will also ensure the EU financial services rules are fit for the digital world.
Data management was a key focus of the new plans, with the Commission promoting the sharing of data and open finance, whilst maintaining a strong arm on data privacy and protection.
Finally, the European Commission is hoping to keep a level playing field for providers of financial services.
Valdis Dombrovskis, executive vice president for an Economy that works for People, said, “The future of finance is digital. We saw during the lockdown how people were able to get access to financial services thanks to digital technologies such as online banking and fintech solutions. Technology has much more to offer consumers and businesses and we should embrace the digital transformation proactively, while mitigating any potential risks.
“That’s what today’s package aims to do. An innovative digital single market for finance will benefit Europeans and will be key to Europe’s economic recovery by offering better financial products for consumers and opening up new funding channels for companies.”
The retail payments strategy will make it easier for consumers to pay in shops and make e-commerce transactions. It also seeks a fully integrated retail payments system in the EU, including instant cross-border payment solutions.
This will facilitate payments in euro between the EU and other jurisdictions.
The proposals to crypto-assets include a legislation that will boost their innovation while maintaining financial stability and protecting investors from risks. Safe guards include capital requirements, custody of assets, a mandatory complaint holder procedure available to investors, and rights of the investor against the issuer.
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