TechREG Weekly EMEA: Officials Call for Crypto Regulation
This week, European policymakers and regulators continued to issue warnings about cryptocurrencies as “highly speculative assets” and renewed calls for “consistent and comprehensive” crypto regulation.
Meanwhile, the European Union Parliament debated the new consumer credit directive, which could include buy now, pay later (BNPL) solutions, currently exempt. He will likely vote on the measure in June, with final approval expected in July. The European Parliament also approved the final agreement with EU member states on the Digital Markets Act which will impose strict conditions on Big Tech.
In the UK, financial and payment regulators have been given new powers to tackle scams and fraud.
Crypto still on the agenda
EU Regulators Crack Down on Stablecoins While Boosting CBDCs
After a previously volatile week for stablecoins and cryptocurrencies, this week began with a new call from EU regulators to review the space and boost alternatives to private digital currency, namely the digital euro. .
On Monday, May 16, two senior central bankers criticized crypto-assets and the disruption they could bring to the international financial system if left unregulated. First, Banque de France Governor Francois Villeroy de Galhau told a conference in Paris that more regulation is needed and that crypto assets should be consistently and appropriately interoperable across jurisdictions.
The second official to discuss this issue was Fabio Panetta, Member of the Executive Board of the European Central Bank (ECB). Panetta has previously warned of the risks associated with crypto assets, and during his speech Monday morning in Dublin, he also warned that stablecoins are vulnerable to runs.
G-7 calls for ‘coherent and comprehensive’ crypto regulation
Financial leaders from the Group of Seven (G-7) on Thursday (May 19) called on the Financial Stability Board (FSB) to develop “coherent and comprehensive” regulation on cryptocurrencies. The executives cited the recent collapse of stablecoin Terra and the ensuing chaos in the crypto world that followed.
BoE Official Warns of Disastrous Crypto Future
Jon Cunliffe, Deputy Governor of the Bank of England, said crypto investors should expect tougher times. That will come as central banks raise interest rates, making safer assets better bets. When asked at a Wall Street Journal conference whether rising interest rates would add pressure on crypto, Cunliffe said there would likely be an “exit from risky assets” as the process would continue.
Lawmakers and regulators will pass new rules to protect consumers
New EU consumer credit rules could be approved by summer
European lawmakers discussed on Tuesday (17 May) proposed amendments to the Consumer Credit Directive (CCD), which will be put to a vote in committee in June with a view to obtaining final approval in plenary session before the summer break .
The existing CCD dates from 2008, and although it introduced a number of consumer benefits, it does not include many new lending initiatives widely used by consumers such as BNPL, payday loans or short-term overdraft facilities.
The commission’s proposal aims to respond to these technological developments by broadening its scope, introducing pricing rules for certain credits, clarifying information requirements and revising credit ratings.
UK payments regulator to get more powers to tackle authorized push payment fraud
The UK Payments System Regulator (PSR) continues its fight against Authorized Push Payments (APP) fraud. One of the actions taken by the regulator was to issue a new rule in February 2022 which paved the way for more banks and building societies to adopt beneficiary confirmation (CoP), the name verification services of Bank accounts.
The plan started in 2020 with the UK’s six largest banking groups, but the new 2022 rule has widened the scope of the plan and by May 31 the first phase will be complete. In the second phase, which begins on June 1, all payment service providers (PSPs) will have to ensure that the CoP service is available.
UK FCA to fight fraud by revoking authorizations in 28 days
The UK’s Financial Conduct Authority (FCA) announced on Thursday that it will use new powers to more quickly cancel or change the regulated activities that companies are allowed to engage in. The regulator may cancel any authorization given to a regulated entity, or modify it, 28 days after the first warning if the company has not taken the appropriate measures. Essentially, companies will be required to prove that they are carrying out the regulated activity for which they are authorized or risk losing this authorization.
Big Tech has a quieter week
The European Parliament approves the agreement on the law on the digital market
The European Parliament’s Internal Market Committee on Tuesday approved the tentatively reached an agreement with EU governments on the Digital Markets Act (DMA) with 43 votes in favour, one against and one abstention, according to a Press release.
A tentative deal on a sister proposal to regulate online platforms, the Digital Services Act, has been reached. reached on April 23, according to another Press release. Both proposals are expected to go to a final vote in Parliament in July before being formally adopted by the Council and published in the EU’s Official Journal. The DMA regulation will enter into force 20 days after its publication and the provisions will begin to apply six months later.
BaFin asks Deutsche Bank for clarification on corporate communications via WhatsApp
German financial watchdog BaFin has ordered Deutsche Bank to clarify how its staff use private messages on WhatsApp for work purposes, as part of a global effort to curb the practice of mixing business with personal life. BaFin wants to make sure that Deutsche Bank officials follow banking rules. The request comes at a time when Deutsche Bank CEO Christian Sewing has spent billions of dollars trying to fix the bank’s controls and improve relations with supervisors.