EU looks to the future with new crypto-asset and operational resilience regimes

The European Commission has published a suite of materials which will set the EU’s fintech agenda for years to come. This includes draft legislation for crypto-assets and operational resilience which will now be taken forward by the EU.

What you need to know
  1. A “MiFID for crypto-assets”: The draft Markets in Crypto-Assets Regulation would set an ambitious EU-wide framework for the regulation of hitherto unregulated crypto-assets and stablecoins, distinguishing between e-money tokens and asset-referenced tokens and introducing a passport for introducing a passport for providing crypto-asset services.
  2. BigTech to be supervised: The draft Digital Operational Resilience Act would impose prescriptive requirements on the management of IT risks for all EU financial entities. Also, IT service providers that are “critical” for EU financial entities – including cloud service providers – would be subject to EU regulatory oversight, in many cases for the first time.
  3. Pilot DLT sandbox: The draft pilot for Market Infrastructure based on Distributed Ledger Technology would create, for the first time, an EU-wide sandbox. It would be focused on testing ways to trade and settle transactions in financial instruments using crypto-assets.
A new approach to fintech

The legislative proposals highlighted above are part of the Commission’s new Digital Finance Strategy. It has also published a separate Retail Payments Strategy for the EU. Together these papers set the priorities for the digital transformation of the EU financial sector and the retail payments landscape, effectively replacing the previous 2018 fintech action plan.

We have tracked the development of these proposals in previous blogposts, including:

Next steps

The Digital Finance and Retail Payments Strategies have been finalised and will be implemented over the next few years.

The legislative proposals will be taken forward by the legislative branches of the EU, i.e. the Council and Parliament. These bodies will try to find a political agreement on the form of the texts before they are then formally adopted and made law.

We will update you with more detail on the important aspects of the latest proposals in future blogposts.