Friday, November 26

European Central Bank approves new framework to supervise bitcoin operations

A new regulatory framework to oversee electronic payments with digital assets, including bitcoin (BTC) and all other cryptocurrencies, was approved this week by the European Central Bank (ECB). They say he intends to make the payments ecosystem “secure and efficient.”

On session of the Governing Council of the ECB on Monday, November 22, the marco supervision of the Eurosystem for electronic payment instruments, schemes and agreements: PISA, which replaces the current payment supervision regulation valid since 2017. In addition, it extends it to cryptocurrency-related systems, such as exchanges and digital wallets.

“The Eurosystem will use the new framework to monitor companies that allow or support the use of payment cards, credit transfers, direct debits, electronic money transfers and digital payment tokens, including electronic wallets,” reads a press release. of the European Central Bank.

More in detail and on the cryptocurrencies used for everyday trading, the new regulatory framework proposes monitor payments made with bitcoin in business premises “Within a card payment scheme and the option to send, receive or pay with crypto assets through an electronic wallet”.

In the words of Fabio Panetta, who is a member of the Executive Board of the ECB, the retail payments ecosystem “is evolving rapidly due to innovation and technological change.” “This requires a forward-looking approach in monitoring digital payment solutions,” he added.

The PISA framework will include digital payment tokens such as stablecoin, along with traditional payment instruments and schemes that we have gained experience with over the years. Internationally coordinated action will also need to intensify to address the challenges posed by global digital payment solutions and stablecoins.

Fabio Panetta, member of the Executive Board of the ECB.

The framework will come into effect in November 2022 / Source: BDE.

One year to join

The ECB indicates that companies that are already subject to its supervision must adhere to the principles of this new framework before November 15, 2022, date when the ordinance goes into effect.

They also specify that other companies will have a grace period one year from the moment they are notified that they will be supervised.

“All supervised companies will be invited to submit self-assessments and supporting documentation, which will form the basis of a continuous dialogue between them and the supervisor,” they specify.

At least in Spain, this new regulation is an additional weight for companies related to the cryptocurrency market. In that country, they now have to comply with two ordinances: the registration of service operators and now this new ECB regulatory framework.

A drive for regulation

The new framework, which is essentially stricter, demonstrates the intentions and eagerness of the ECB to regulate bitcoin and the entire market structure, something that has been dragging on since the beginning of the year.

In January, the president of the Bank, Christine Lagarde, described the first cryptocurrency as a threat and that its regulation should be a matter of global scale, due to its alleged use for money laundering, terrorist financing and other crimes, we reviewed in CriptoNoticias.

Soon after, the ECB exclaimed that all payments made with digital assets, such as cryptocurrencies, they must be tracked, violating the privacy characteristic of this new money.

As we reported, Fabio Panetta of the ECB claimed that crypto assets are “very dangerous animals.” “It is very difficult to regulate and supervise them because there is no responsible legal entity and they are decentralized,” he said.

And not enough, in an attempt to measure itself against bitcoin, have made progress in developing their own central bank digital currency (CBDC), the digital euro, an asset regulated by the States and which, for analysts, is nothing more than digitized fiat.

For this, 30 experts in retail trade will advise the bank on the design and distribution of the asset. We report it here: the now officials of the ECB will work “in a personal capacity” from an “industrial perspective”. Likewise, they will instruct on how the digital euro could add value to all the agents of the diverse payments ecosystem in that region.

The new regulation is one more step for the BDE in its attempt to control bitcoin, which is increasingly used in the old continent and is seen as a reliable economical alternative for many of its inhabitants.

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