The European Union Blockchain Observatory and Forum, an EC initiative, published its June newsletter, which offers an update on the entity's activities. The newsletter covers the activities and events in EU on topics such as blockchain and artificial intelligence. This issue of the newsletter contains reports on the recent workshops on governance and on digital assets, covers the current technology-related issues in focus, and announces the publication of the final version of the academic research paper on digital assets. Prepared by the University of Southampton, one of the Observatory’s Academic Partners, topics covered in the paper include tokens and transactions, fungible and non-fungible token standards, initial coin offerings, and digital asset ecosystems.
The research paper on digital assets highlights that regulators at the EU level have been working on clarifying the situation with respect to the link with legislation applicable to traditional securities. Allowing the "intrusion" of regulators might be considered an attack to the decentralized principles of blockchains that could slow down the impact EU companies and organizations could get from the technology. However, it is believed that this is not the case here, and that appropriate regulation is positive and will benefit all actors. On this topic, an interesting research and development direction is the implementation of regulatory frameworks in blockchains—in the same way that other approaches have explored the use of blockchains for verification and compliance (immutable records for e-government, ownership of real-world assets, GDPR compliance). If the rules of compliance can be encoded and deployed into a blockchain, it would be possible to leverage the transparency and trust capabilities of blockchains beyond the implementation of a closed economic system and into the interaction of these ecosystems with regulatory frameworks.
As mentioned in the newsletter, the issues of interest among the community during the month include the following:
- Facebook unveils Libra cryptocurrency, targeting 1.7 billion unbanked
- Italy’s banking sector will boost reconciliations with blockchain
- Iceland’s currency will be first in Europe to be traded as e-money
- Russia’s central bank is considering launching a digital currency
- French retail chain Carrefour registers sales boost following blockchain integration
- EU stimulates digital innovation by increasing the availability of publicly funded data
- Research Paper on Digital Assets (PDF)
- Report on Governance Workshop (PDF)
- Report on Digital Assets Workshop (PDF)
- EU Blockchain Observatory and Forum
Keywords: EU, Banking, Insurance, Securities, Blockchain, Newsletter, Blockchain Observatory, Fintech, Regtech, Digital Assets, Blockchain Governance, Compliance, EC
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EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).
EBA updated the list of other systemically important institutions (O-SIIs) in EU.
BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.
UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.
PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.
MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.
ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.