On Thursday 8th March, the European Commission released an Action Plan that provides opportunities to FinTech financial services.
FinTech – is short of Financial Technologies.
During the release of the Action Plan, Mariya Gabriel, Commissioner for the Digital Economy and Society stated that: “Technologies like blockchain can be game changers for financial services and beyond. We need to build an enabling framework to let innovation flourish while managing risks and protecting consumers.”
Nowadays, technology gained popularity and are of beneficial use to Financial Institutions. The European Commission is seeking to regulate and provide FinTech around EU states. Since the introduction of the blockchain technology, the European Commission is helping financial institutions to regulate and use this digital technology.
Through the introduction and regulation of such technologies FinTech, companies can use crowdfunding platforms more freely.
Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union, Valdis Dombrovskis, said that “To compete globally, Europe’s innovative companies need access to capital, space to experiment and scale to grow. An EU crowdfunding licence would help crowdfunding platforms scale up in Europe. It will help them match investors and companies from all over the EU, giving more opportunities for firms and entrepreneurs to pitch their ideas to a wider base of funders.”
The European Commission has sought the need to regulate these new technologies such as blockchain, artificial intelligence and cloud service. These regulations in digital technologies will provide safer markets and easier access for new players in the industry.
Who will benefit from this FinTech Action Plan?
Since Blockchain technology is increasing in popularity, many businesses are merging in this new sector. Moreover, the European Union is envisaging that consumers, investors, banks and new market players will benefit from these digital technologies.
In the wake of the blockchain technology phenomenon, the European Commission is now seeking to implement a Digital Single Market (DSM) around member states. By the introduction of DSM, the Commission will licence the use of digital technology across Europe. This licence will allow European companies to operate across EU states with the same concept as the single market.
By building a FinTech laboratory, European national authorities will be provided with a neutral commercial space through technology. The Commission is seeking to set-up a Capital Markets Union (CMU), hence becoming a digital hub for the single market for financial services.
Through this Action Plan, the European Commission is aiming to regulate the blockchain technology. Hence, blockchain innovation will provide a beneficial use to financial institutions.