Executive Vice-President Valdis Dombrovskis

Opening statement at the European Parliament Plenary debate on Digital Finance: emerging risks in crypto-assets – regulatory and supervisory challenges in the area of financial services, institutions and markets

Brussels, 7 October 2020

Honourable Members,

Today’s debate is very timely and important to make progress on key EU priorities: the recovery, strengthening the resilience of our economy, supporting the transition to a green and digital economy.

The European Commission recently adopted two major initiatives to promote those objectives: a Digital Finance package and a new Action plan on the Capital Markets Union.

First, I would like to thank Mr Kovarik on  his report. The Commission’s digital finance strategy is fully in line with its principles.

But it is not only about principles. Commission President Ursula von der Leyen committed to responding with a legislative act, in full respect of the proportionality, subsidiarity and better law making principles, when Parliament adopts  a resolution requesting that the Commission submits legislative proposals, based on the article 225 of the Treaty on the Functioning of the European Union.

And indeed, with the digital finance strategy the Commission committed to take specific action to follow up on the report’s recommendations. For example, we will propose in 2021 to harmonise rules on customer onboarding. And will build on the upcoming review of the rules on electronic identification to implement an interoperable cross-border framework for digital identities.

Time is of essence in the fast-moving world of digital finance. This is why the Commission has already acted in line with   recommendations of the report.

The proposal on crypto-assets brings clarity on the rules governing transparency, prudential standards and market integrity. It aims to allow companies to draw on the possibilities offered by these assets, and more generally by new technologies such as  blockchain. And to do it in such a way as to mitigate risks for investors and preserve financial stability.

The Commission moved not only to close the regulatory gap for those crypto-assets that are not covered by the existing rules. In line with your report, we are also proposing  amendments to make sure that certain crypto-assets fit into the current regulatory framework. And we proposed a pilot regime for market operators to test innovations in a safe and controlled environment.

The report rightly adressesthe risk of tax evasion linked to crypto-assets. Our July action plan for fair and simple taxation envisages expanding the scope of the directive on administrative cooperation to cover all  crypto-assets. We will come with a proposal in 2021.

I also share the concerns expressed in the report about the money-laundering risks that may be associated to crypto-assets.

Crypto-assets are already covered by the fifth Anti-Money Laundering Directive. Our proposal covers all  the crypto-asset service providers listed in the Financial Action Task Force standards. It puts considerable requirements on service providers to protect consumers, market integrity and financial stability. Additional requirements will follow from future proposals to overhaul the EU anti-money laundering framework in 2021.

The Commission also agrees on the need for a common approach to  resilience of our ICT infrastructures.

This is why we put forward legislative proposals on digital operational resilience. It aims to ensure that all financial market participants have put safeguards in place to cope with cyber-attacks and other ICT risks. It also introduces an EU oversight framework for ICT providers to financial entities, such as cloud computing service providers.

I count on  Parliament to make swift progress on these proposals.

Honourable Members,

Let me turn now to the Capital Markets Union.

I would like to thank Ms Benjumea for her draft report. The Commission shares its priorities, and welcomes its ambition.

Developing our capital markets now, at a time of crisis, matters more than ever.

As your report underlines, we need to stimulate financing around Europe. We need more financing opportunities to help start-ups and to help larger companies to thrive.

We now have 27 national capital markets that are neither fully developed nor fully integrated. This is particularly important in light of Brexit.

And Europeans do not get the most out of their savings because they lack the confidence to invest in capital markets. So we need to create more opportunities for Europeans to invest safely for their future.

We also need to get more funding for the green and digital transitions. Last but not least, to strengthen the international role of the euro.

With our action plan, we have 16 initiatives to achieve these objectives.

Let me just name a few :

  • helping large investors to invest more in EU businesses, including for the long term;
  • making information on EU companies more easily accessible – digitally - for EU and non-EU investors by using a single access point;
  • helping Europeans to save safely for their future, for them to buy the best and cheapest financial products and so that their pensions are adequate and sustainable.

The Commission will  propose legislation as of next year to achieve these objectives.

With your support, we can really make progress towards completing the Capital Markets Union.

Thank you.