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Source: European Parliament 2

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with recommendations to the Commission on Digital Finance: emerging risks in crypto-assets – regulatory and supervisory challenges in the area of financial services, institutions and markets

(2020/2034(INL))

The European Parliament,

 having regard to Article 225 of the Treaty on the Functioning of the European Union,

 having regard to Articles 7 and 8 of the Charter of Fundamental Rights of the European Union,

 having regard to Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46/EC (General Data Protection Regulation)[1],

 having regard to Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC[2],

 having regard to Directive (EU) 2015/849 of the European Parliament and the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC[3],

 having regard to the Communication from the Commission of 19 February 2020 entitled ‘A European Strategy for Data’[4],

 having regard to the Communication from the Commission of 8 March 2018 entitled ʻFinTech Action plan: For a more competitive and innovative European financial sectorʼ[5],

 having regard to the Commission and High Representative of the Union for Foreign Affairs and Security policy’s Joint Communication of 6 April 2016 entitled ‘Joint Framework on countering hybrid threats – a European Union response’[6],

 having regard to the White Paper of the Commission of 19 February 2020 entitled  ʻArtificial Intelligence – A European approach to excellence and trust’[7],

 having regard to the answer given by Vice-President Dombrovskis on behalf of the Commission TO E-001130/2017 of 10 April 2017,

 having regard to the Final report of the Directorate-General for Financial Stability, Financial Services and Capital Markets Union of the Commission of October 2019 entitled ‘Governance for a DLT/ Blockchain enabled European electronic Access Point (EEAP)’[8],

 having regard to the study of the Commission on the application of the Interchange Fee Regulation[9],

 having regard to the public consultation of the Commission of 17 February 2020 on the ‘Review of the regulatory framework for investment firms and market operators’,

 having regard to the Final Report of the High Level Forum on the Capital Markets Union of the Commission of 10 June 2020 entitled ‘A New Vision for Europe’s Capital Markets’[10],

 having regard to the Final report of the Commission’s Expert Group on Regulatory Obstacles to Financial Innovation: 30 recommendations on regulation, innovation and finance of 13 December 2019,

 having regard to the Joint Advice of the European Supervisory Authorities to the European Commission on the need for legislative improvements relating to ICT risk management requirements in the EU financial sector of 10 April 2019,

 having regard to the Joint Advice of the European Supervisory Authorities to the European Commission on the costs and benefits of developing a coherent cyber resilience testing framework for significant market participants and infrastructures within the whole EU financial sector of 10 April 2019,

 having regard to the joint report of the European Supervisory Authorities entitled ‘FinTech: Regulatory sandboxes and innovation hubs’ of 7 January 2019[11],

 having regard to the European Banking Authorities’ Guidelines on ICT and security risk management of 29 November 2019,

 having regard to the European Banking Authority Report with advice for the European Commission on crypto-assets of 9 January 2019,

 having regard to the advice of the European Securities and Markets Authority to the Commission on Initial Coin Offerings and Crypto-Assets of 9 January 2019,

 having regard to the European Commission’s Consultation Paper on an EU framework for markets in crypto-assets of December 2019,

 having regard to its legislative resolution of 27 March 2019 on the proposal for a regulation of the European Parliament and of the Council on European Crowdfunding Service Providers (ECSP) for Business  [12],

 having regard to its resolution of 3 October 2018 on distributed ledger technologies and blockchains: building trust with disintermediation[13],

 having regard to its resolution of 17 May 2017 on FinTech: the influence of technology on the future of the financial sector[14],

 having regard to its resolution of 16 February 2017 with recommendations to the Commission on Civil Law Rules on Robotics[15],

 having regard to the study requested by the European Parliament’s Committee on Economic and Monetary Affairs entitled ‘Crypto-assets: Key developments, regulatory concerns and responses’ of April 2020,

 having regard to the study requested by the European Parliament’s Committee on Internal Market and Consumer Protection ‘Consumer Protection: Aspects of Financial Services’ of February 2014,

 having regard to the report of the European Central Bank on implications of digitalization in retail payments for the Eurosystem’s catalyst role of July 2019,

 having regard to Benoît Coeure’s keynote speech ‘FinTech for the People’ of 31 January 2019,

 having regard to Yves Mersch’s keynote speech ‘Lending and payment systems in upheaval: the FinTech challenge’ of 26 February 2019, at the 3rd Annual Conference on FinTech and Digital Innovation,

 having regard to the report by the Financial Stability Board ‘Decentralized financial technologies: Report on financial stability, regulatory and governance implications’ of 6 June 2019,

 having regard to the report by the Financial Stability Board on ‘FinTech and market structure in financial services: Market developments and potential financial stability implications’ of 14 February 2019,

 having regard to the report by the Financial Stability Board ‘Crypto-assets: Report to the G20 on work by the FSB and standard-setting bodies’ of 16 July 2018,

 having regard to the report by the Financial Stability Board on ‘Financial Stability Implications from FinTech, Supervisory and Regulatory Issues that Merit Authorities’ Attention of 27 June 2017,

 having regard to the consultative document by the Financial Stability Board ‘Addressing the regulatory, supervisory and oversight challenges raised by “global stablecoin” arrangements’ of 14 April 2020,

 having regard to the investigation of the G7 Working Group on Stablecoins on the impact of global stablecoins of October 2019,

 having regard to the Financial Action Task Force’s ‘Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers’ of June 2019,

 having regard to the Financial Action Task Force’s Recommendations as updated in June 2019, in particular Recommendation 16 on wire transfers,

 having regard to the analysis of the Bank for International Settlements ‘Policy responses to FinTech: a cross-country overview’ of January 2020,

 having regard to Fernando Restoy’s intervention ‘Regulating FinTech: what is going on, and where are the challenges?’ of 16 October 2019, at the ASBA-BID-FELABAN XVI Banking public-private sector regional policy dialogue,

 having regard to Rules 47 and 54 of its Rules of Procedure,

 having regard to the report of the Committee on Economic and Monetary Affairs (A9-0161/2020),

 

A. whereas digital finance is a consistently evolving area of the financial sector which deserves ongoing monitoring and consideration both on an industry and regulatory level;

B. whereas the Union’s internal market is characterised by open competition and aims to create a level playing field through a harmonised regulatory framework, reliance on international standards, supervisory convergence and supervisory cooperation; whereas the Union’s digital finance strategy should therefore be based on the same principles;

C. whereas there is a need for a balanced approach in regulating FinTechs in encouraging innovation and ensuring a high degree of investor protection and financial stability;

D. whereas the term ‘crypto-assets’ is used to refer to a wide variety of digital assets, including but not limited to virtual currencies and tokens, but sometimes excluding certain forms of stablecoins or certain tokens such as security tokens;

E. whereas the two most common components of crypto-assets adopted are (i) the private nature of the entitlement regarding the underlying asset, claim or right, and (ii) the use of cryptography and distributed ledger technology (DLT) or similar technology to underpin exchanges of the asset and its inherent or perceived value;

F. whereas, at present, crypto-assets are neither issued nor guaranteed by a central bank or public authority in the Union, and can have a variety of uses, including as a means of exchange, for investment purposes, and in order to access a good or service;

G. whereas stablecoins exhibit similar features to crypto-assets and do not take the form of any specific currency, but rely on a set of tools which aim to minimise fluctuations of their price as denominated in a currency; whereas some crypto-assets, including stablecoins and their associated technologies, have the potential to increase efficiencies, competition and transparency and to bring substantial opportunities and benefits to society, since some of them could lead to cheaper and faster payments and offer new funding sources for small and medium-sized enterprises (SMEs); whereas the set of tools aiming to minimise price fluctuations has not been tested in situations where significant numbers of transactions are being carried out with stablecoins;

H. whereas public debate about privately launched stablecoins may be related to certain shortcomings of the Union’s payments landscape;

I. whereas stablecoins might become a widely used means of payment, which should trigger appropriate regulatory and supervisory action;

J. whereas a Central Bank Digital Currency (CBDC) is based on the concept of a stable asset, is sovereign in nature and therefore distinct to crypto-assets; whereas the People’s Bank of China is trialling a central bank digital currency (the DCEP); highlights that the potential global use of the DCEP could have implications for international trade and consumer protection;

K. whereas possible initiatives for implementing CBDCs are under consideration, both within the Union and on a global level;

L. whereas digital finance has a strong cross-border element, which goes beyond the Union level and therefore international cooperation and standard-setting as well as an efficient and effective Union supervision in this field is essential;

M. whereas the development of digital finance tools can have a strong capital flows element which attracts cross-border investments; stresses that therefore digital finance can contribute to Union competitiveness on global markets;

N. whereas, according to market data[16], as of June 2020, over 5,600 crypto-assets exist globally, with a total market capitalisation exceeding USD 260 billion

ANNEX TO THE MOTION FOR A RESOLUTION: RECOMMENDATIONS AS TO THE CONTENT OF THE PROPOSAL REQUESTED
EXPLANATORY STATEMENT

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE
FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

44

+

ECR

Johan Van Overtveldt

GUE

Chris MacManus

NI

Piernicola Pedicini

PPE

Isabel Benjumea Benjumea, Stefan Berger, Christian Doleschal, Frances Fitzgerald , José Manuel García Margallo y Marfil, Enikő Győri, Danuta Maria Hübner, Georgios Kyrtsos, Aušra Maldeikienė, Eva Maydell, Siegfried Mureşan, Luděk Niedermayer, Lídia Pereira, Sirpa Pietikäinen, Ralf Seekatz, Inese Vaidere

RENEW

Engin Eroglu, Luis Garicano, Billy Kelleher, Ondřej Kovařík, Caroline Nagtegaal, Dragoș Pîslaru, Stéphane Séjourné, Stéphanie Yon Courtin

S&D

Marek Belka, Jonás Fernández, Eero Heinäluoma, Eva Kaili, Aurore Lalucq, Margarida Marques, Csaba Molnár, Pina Picierno, Evelyn Regner, Alfred Sant, Joachim Schuster, Pedro Silva Pereira

VERTS/ALE

Damien Carême, Sven Giegold, Claude Gruffat, Kira Marie Peter Hansen, Ernest Urtasun

 

5

GUE

José Gusmão, Dimitrios Papadimoulis

ID

Gunnar Beck, Jörg Meuthen

NI

Lefteris Nikolaou Alavanos

 

8

0

ECR

Derk Jan Eppink, Eugen Jurzyca, Roberts Zīle

ID

Francesca Donato, Valentino Grant, Antonio Maria Rinaldi, Marco Zanni

VERTS/ALE

Stasys Jakeliūnas

 

Key to symbols:

+ : in favour

 : against

0 : abstention

 

 

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