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
HKMA is consulting on revisions to the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.
PRA provided further information on the application of regulatory capital and IFRS 9 requirements to payment holidays granted or extended to address the challenges arising from COVID-19 outbreak.
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
US Agencies (FDIC, FED, and OCC) published a final rule that makes technical changes to the March 31, 2020 interim final rule that provides a five-year transition period for the impact of the current expected credit loss (CECL) methodology on regulatory capital.
ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.