The European Commission has designed a new Digital Finance framework including Digital Finance and Retail Payments Strategies, and legislative proposals on crypto-assets and digital resilience.
This was disclosed in a statement issued by the Commission on Thursday.
What it means; The European Commission is paying special attention to developing a regulatory framework that will support the digitization of assets through tokenization and also smart contracts.
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Why is it happening now? It plans to give investors, consumers, traders choice and opportunities in modern payments and financial services while at the same time ensuring consumer protection and financial stability.
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.”
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What the European Commission plans to regulate include;
- Crypto-assets qualifying as “financial instruments” under the Markets in Financial Instruments Directive (e.g.: tokenized equities or tokenized bonds) have already in the past been subject to EU securities markets legislation.
- Crypto-assets that do not qualify as “financial instruments” such as utility tokens or payment tokens, the Commission on 24 September proposed a specific new framework that would replace all other EU rules and national rules currently governing the issuance, trading, and storing of such crypto-assets.
- This Markets in Crypto-Assets Regulation – MiCA – will support innovation while protecting consumers and the integrity of crypto-currency exchanges (no insider trading, front running, etc).
- The proposed regulation covers not only entities issuing crypto-assets but also firms providing services around these crypto-assets such as and firms operating digital wallets, as well as cryptocurrency exchanges.
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Recall Nairametrics a week ago broke the news on Nigeria’s Securities and Exchange Commission (SEC), proposing a new set of rules that will regulate Crypto-token or Crypto-coin investments when the character of the investments qualifies as securities transactions.
