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Two documents from the European Union show that the European Union will introduce new regulatory rules within four years to make cross-border payments faster and cheaper by using encrypted assets such as blockchain and stable coins.
According to Reuters, with 78% of payments in the Eurozone being cash, the European Commission will formulate strategies to encourage more use of digital finance. It also hopes to quickly switch to “instant” payment methods because of the increasing role of cashless payments under large-scale blockade policies.
The document stated that the European Commission will submit a draft law clarifying how existing rules apply to encrypted assets and formulating new rules where there are loopholes.
The document reads, “By 2024, the EU should establish a comprehensive framework to enable the financial sector to adopt distributed ledger technology (DLT) and encrypted assets, and it should also address the risks associated with these technologies.”
A stablecoin is a cryptocurrency that is usually backed by traditional assets. Last year, when Facebook announced its Libra stablecoin plan, central banks of various countries were actively studying whether to launch their own digital currencies.
According to the document, the EU also hopes to make it easier to share data within the financial sector while adhering to the principles of “same risks, same rules, and same supervision” to encourage competition and wider services.
In addition, the EU should also introduce relevant regulations within four years. Once the anti-money laundering and identity checks are completed, new customers can quickly start using financial services.
The report also predicts that by the end of 2021, instant payment systems will become the “new normal.” In addition to traditional credit card transfers, instant payment is also suitable for many other purposes, especially offline shopping and online shopping, which are currently dominated by payment card models.