The European Commission adopted a digital finance package, including a digital finance strategy and legislative proposals on crypto assets and digital resilience. The EC also noted that the acceleration of digital finance in cross border operations has the potential to enhance financial market integration in the banking and capital markets union.
Valdis Dombrovskis, executive vice-president for an Economy that works for People, said in a statement: “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 Association for Financial Markets in Europe welcomed the package and said it takes an important step towards addressing regulatory fragmentation, supporting cross-border activity, improving digital operational resilience, and encouraging technology adoption and innovation in European wholesale capital markets.
James Kemp, managing director, head of Technology and Operations at AFME, said in a statement: “This publication is an important step forward in creating a regulatory environment that is fit for purpose, promotes the application of ‘same activity, same risk, same regulation’, and ensures that Europe leads in the digital age.”
“Same activity, same risk, same regulation” refers to the need for a variety of market participants to be subject to supervision: from traditional market actors (banks, insurance and investment companies) to fintechs and bigtechs that
provide payments, savings, insurance.
“In the current global climate, the importance of technology in enabling connected, secure, and resilient financial markets is set to grow. To help support this growth, a strong framework for crypto assets along with a harmonized framework for digital operational resilience will be key in underpinning innovation in the EU.” Kemp further warned however that the focus should be “on developing a harmonized and globally coherent approach.”