European Commission seeks to regulate cryptocurrencies

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Sept. 24 (UPI) — The European Commission revealed Thursday it plans to regulate cryptocurrencies in an effort to make them safer for owners and investors.

The unregulated cryptocurrencies are known for their wild swings in valuations and sizable risk investors take by getting involved with them. But many financial officials also believe they are the currency of the future.

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The commission said their plans seek to ensure consumers have protection and financial stability needed as the use of cryptocurrencies expand.

“The future of finance is digital,” Valdis Dombrovskis, executive vice-president for an Economy that Works for People, said in a statement. “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.”

The commission announced plans that include strategies to address digital finance, retail payments and legislative proposals for a regulatory framework in Europe on crypto-assets. It will also present proposals on regulatory framework on digital operational resilience.

Its digital finance strategy will work to make the financial service industry more digital-friendly and spark innovation and competition among financial service providers. The strategy will look to give consumers more access to financial products across borders and that Fintech start-ups scale up and grow.

“It will ensure that E.U. financial services rules are fit for the digital age, for applications such as artificial intelligence and blockchain,” the commission said in a statement. “Data management is also at the heart of today’s strategy. In keeping with the commission’s broader data strategy, the objective of today’s measures is to promote data sharing and open finance, while maintaining the E.U.’s very high standards on privacy and data protection.”

The commission’s retail strategy seeks to help customers make retail payments safely and conveniently while legislative proposals will seek to offer more protections for users.

“Safeguards include capital requirements, custody of assets, a mandatory complaint holder procedure available to investors, and rights of the investor against the issuer,” the commission said. “Issuers of significant asset-backed crypto-assets (so-called global ‘stablecoins’) would be subject to more stringent requirements.”

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