The European Union (EU) has a plan to use blockchain technology and cryptocurrency in financial structure, especially in cross-border money transfers.
Comprehensive Framework
The two internal documents of the European Union have revealed that the EU will incorporate blockchain and cryptocurrency in a cross-border payment system by 2024. As Reuters reported, the European Commission is going to favor digital finance even though the majority of payments (78%) are normally settled in cash in Europe. Coronavirus pandemic has a greater role in shifting attention towards a cashless payment system.
“By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector,” the document reads. The crypto rules will also “address the risks associated with these technologies.”
Libra Stimulates the Digital Assets Race
European authorities have started to ponder after the Libra project rolled out by Facebook in 2018. Libra has also stimulated central banks of various countries to roll out their own digital currency. Brussels also offers healthy competition in the financial sector but insists on the principle of “same risk, same rules, same regulation.”
“By 2024, the principle of passporting and a one-stop shop licensing should apply in all areas which hold strong potential for digital finance,” the document stated. It is expected that by the end of 2021, the instant payment system will become the “new normal.”
While in some countries, cryptocurrency is really at risk. For example, India is planning to ban cryptocurrency with the issuance of a new crypto bill. The bill about digital assets will be discussed by the cabinet members before passing it to the parliament. According to two unknown sources, cabinet members are happy with blockchain technology and its growth in the country but not with crypto trading. Sanjay Khan, Partner at Khaitan & Co, said that India needs “to ensure adequate oversight of the government and the RBI over cryptocurrency businesses…India can actually benefit from such a regulation to attract cryptocurrency investors and businesses.”