The European Union (EU) intends to introduce a set of rules within the next four years that utilizes blockchain and crypto assets (like stablecoins) to improve cross border payments.
In a report published by TheSun newspaper, it has been confirmed that two EU documents have explained the EU’s new strategy to encourage digital finance. Despite 78 percent of payments within the euro zone involving the use of cash, this four-year intention hopes to shift to “instant” payments in lieu of the COVID-19 pandemic aftermath. By utilizing blockchain and crypto-assets, cross-border payments will be made cheaper and quicker.
Blockchain cashless payments to become the future of finance
The role of cashless payments has been increasing following the incorporation of pandemic safety precautions. As physical contact limitations reach an all-time high, digital crypto currencies are increasingly becoming the most preferred financial option.
The documents stated that the EU executive will present a draft law explaining the current rules that apply to crypto assets while also introducing new ones.
By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector,”
After Facebook revealed its plan to adopt the Libra token last year, stablecoins rapidly entered the agendas of policymakers – even central bank are considering the launch of their own. Making instant payments is just one of the many advantages of stablecoins and the EU intends to make as quick a transition to digital finance to utilize them.
The documents further state that the “principle of passporting and a one-stop shop licensing” should be realized by 2024 in all areas that show “strong potential for digital finance.” As the EU has long since sought out “home grown” replacements for the like of Visa and Mastercard, the EU has set the goal of making instant payment systems the “new normal” by the end of 2021.
Securing the path ahead
In recent news, EU banks have been demanding regulations of cryptocurrencies. This explains the intention of the EU to establish a crypto-assets regime now, while ensuring protective regulations are in place before, during and after the transition to digital finance.