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New Policy and Regulatory Brief from EDFA

Here are the nine topics covered in EDFA’s new policy and regulatory brief:

  • Markets in crypto-assets (MiCA)

European institutions have reached an agreement on the final text of the MiCA regulation and European policymakers now want MiCA to be the global standard for crypto-assets.

  • To ensure proper supervision and monitoring of public offers of asset-referenced tokens, issuers of asset-referenced tokens will need to have a registered office in the EU.
  • To operate within the EU, crypto-asset service providers will need to be authorized.
  • The cryptocurrency market will be required to disclose information about its environmental and climate footprint.
  • Crypto-asset service providers will be held accountable if they fail to protect consumers’ wallets and lose investors’ crypto-assets.

 

  • Regulation of transfers of funds and certain crypto-assets

The ECON and LIBE committees of the European Parliament have approved a provisional political agreement with the Council of the European Union on the revision of the Regulation on Fund Transfers. The draft modifies the following areas:

  • Internal policies, controls, and procedures of the entities required to comply.
  • This requires DeFi and DAOs to impose a 1000 Euro limit on transactions made through unhosted wallets.
  • Beneficiary crypto-asset service providers should also expect to learn about the source and destination of crypto-assets involved in a transfer.
  • It also establishes new guidelines for NFT providers who must comply with suspicious transaction reporting requirements and KYC checks.
  • The European Banking Authority (EBA) will keep a public list of crypto-asset service providers who are not in compliance.

 

  • G20 finance ministers want global crypto-assets regulation

The Financial Stability Board (FSB), which coordinates financial rulemaking among the Group of 20 (G20), issued nine recommendations for its members to implement. The FSB is attempting to establish a global standard for crypto-asset markets. The underlying principle is that the same activity, whether undertaken by a crypto asset company, a bank, or a payments provider, should be regulated in the same way.

  • Artificial Intelligence Act

The AI act creates new rules for artificial intelligence application emphasizing risk-based approach. The AI act brings these fintech-relevant new rules:

  • Ban of AI systems serving for social scoring if carried out by public authorities or used for running real time remote biometric identification systems in publicly accessible spaces for law enforcement purposes.
  • Regulation of AI systems assessing the creditworthiness of individuals or used in the context of recruitment.
  • Setting a transparency obligations for chatbots and humanoids.

The opinion of the European Parliament’s Committee on Legal Affairs, which is responsible for the interpretation, application and monitoring of Union law, can be found here.

  • AI Act must remain innovation friendly

The European DIGITAL SME Alliance has sent an open letter signed by 59 companies and business associations addressed to the Members of the European Parliament. The Alliance is trying to achieve changes in the proposal and greater support for SME. They are also pursuing a mandatory sanbox rule and avoidance of one-size-fits-all regulatory approach.

  • European Digital Identity

A fourth compromise text on the European Digital Identity (eIDs) has been circulated by The Czech Presidency of the EU Council. The eIDs will grant every person eligible for a national ID card to have a digital identity that is recognised anywhere in the EU. Most importantly eIDs brings the following:

  • The ability to verify users online or through the mobile application.
  • eIDs will play a crucial role in strong customer verification, even if conducted offline.
  • The possibility of opening a bank account, filing tax returns or proving your age and creditworthiness.
  • Albania ploughs ahead with crypto exchange regulation

The Albanian Financial Supervision Authority approved a licensing regime for cryptocurrency exchanges. The licenses will be issued based on submitting detailed documentation, including company organisation, business plans, source of capital, and reputation.

  • Digital Europe Programme: Commission opens calls to invest €200 million in digital tech

The Digital Europe Programme will provide strategic funding to supporting projects in 5 key capacity areas: supercomputing, artificial intelligence, cybersecurity, advanced digital skills, and ensuring a wide use of digital technologies across the economy and society, including through Digital Innovation Hubs.

Check out whether you are eligible for the program and how to apply here.

  • New digital skills & job platform by the European Commission

The European Commission adopted its proposal for the “European year of the Skills 2023”, an initiative to enhance, among other, the digital and IT skills of european workers. With it the EC plans to create the Digital skills & job platform, an online network of companies, associations, workers and teachers with the aim to explore new opportunities, create an international technology experts net and match the demand and supply of IT and STEM workers with fintech and high-skilled companies. Read more here.

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