The European Union (EU) plans to create a comprehensive regulatory framework for cryptocurrencies and Blockchain technology. According to information released by the Reuters agency.
It includes the transfer of money using the blockchain. With this, the aim is to give greater security, speed and stability to the payment system, which guarantees a stimulus for the improvement of trade, they explain.
It should be noted that Reuters quotes statements from the European Commission, which specify some details of what this law will be. For example, they consider taking all measures to accelerate the transformation of cash payments, which dominate throughout the EU.
Cryptocurrencies and Blockchain technology on the EU agenda
According to the estimates of the EU Economic Commission, the use of Blockchain and cryptocurrencies represents a challenge. This is due to the fact that, according to what they say, 78% of payments in the eurozone were made with cash.
With the arrival of the pandemic, there has been a change in this system, in which digital payments have gained a lot of ground. The quarantine and confinement measures have forced the authorities to evaluate the ways in which these digital payments are made optimally.
In this sense, the most reliable technology for the EU is that of Blockchain and cryptocurrencies. Hence, this proposed law has been presented to evaluate a possible comprehensive regulatory framework for both.
The document assures that “By 2024, the EU should implement a comprehensive framework that enables the adoption of distributed ledger technology (DLT) and crypto assets in the financial sector”.
Evaluate benefits and risks
Despite the rebound in digital payments, the European Commission considers that efforts must be made to overcome the system of payments with paper money. To do this, it is sought to promote the use of popular tools for most people, in this case, they consider that Blockchain fulfills that function.
Still, according to them, there could be risks in this new technology, which must be carefully addressed by the commission for this law. Motivated by this, the authorities seek at the same time to promote the Blockchain, to keep it firmly controlled.
By 2024, they say, there should be a licensing system “that would apply to all areas that have great potential for digital finance”.
Between desire and fear
Although the EU wants more speed in the payment system through the use of Blockchain and cryptocurrencies, many of the latter are too autonomous. A payments infrastructure with the blockchain would power Bitcoin and other currencies that are not controlled by centralized bodies.
It is evident that not having absolute control of finances is one of the great fears of centralized bodies like the EU. For this reason, the use of Central Bank Digital Currencies (CBDC).
Blockchain technology, along with cryptocurrencies, continue to push strongly, both in the EU and elsewhere in the world.
Another of the facts related to Blockchain and digital currencies, which keeps the western economy in suspense, is the shadow of China. Beijing is by far the most advanced nation in this technological arena.
At the same time, China is one of the most powerful trading forces on the planet. In simple words, by having a predominant role in trade and a mature digital currency, the Asian nation could become an economic monopoly, something that is unacceptable for the EU.
Data to take into consideration
- By 2024, the EU would have legislation capable of addressing the issue of cryptocurrencies and the Blockchain in a multidimensional way.
- Almost 80% of payments in the European area are made in cash. For this reason, the EU wants to promote digital payments.
- China’s role is a pressure that prompts Western governments to take action in the development of new technology.
- The European regulatory law would be an attempt by that block, to keep the use of the blockchain in its territory controlled.
The information in this content has been extracted from reliable sources detailed below.:
1- Professional handling of content by the authors of CriptoTendencia.
2- External sources: CoinTelegraph.com and Reuters.com.