European Parliament backs the creation of a new FinTech taskforce

The European Parliament has called for the establishment of a taskforce led by the Commission and consisting of technical and regulatory experts to foster understanding of emerging innovations in financial technology including virtual currencies and distributed ledger technology and to focus on developing a proportionate regulatory response.

It adopted substance of the  ECON Report on Virtual Currencies (and DLT) on 26 May and that will now be passed to the Commission for consideration (see press release here).

The EP acknowledged that the nature of virtual currencies, or digital cash, is still evolving and that the European Banking Authority regards them as being a digital representation of value that is neither issued by a central bank nor a public authority nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment, and can be transferred, stored or traded electronically.

It also noted that, whilst distributed ledger technology (DLT) (also commonly referred to as blockchain) is most notably used for virtual currencies, the nature of the technology with databases with varying levels or trust and resilience, has transformational capacity in Fintech more broadly including in clearing and settlement as well as beyond finance, including in proof of identity and property and has attracted investment totalling more than EUR 1 billion to date, from both venture capital funding and corporate investment.

The EP supports well-informed, timely and proportionate response to the opportunities and risks associated with the evolving technological landscape and so has called for a taskforce to be established by the European Commission to help deliver that, clearing the way for the Commission to draw up a budget and process to implement that. 

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