ECB Brings Crypto and Stablecoins Under Payments Regulatory Framework
The European Central Bank’s ECB Governing Council recently approved a new electronic payments framework that would see the inclusion of cryptocurrencies, stablecoins, and digital payment tokens.
Crypto and Stablecoins Under New PISA Framework
In a press release by the ECB on Monday (Nov. 22, 2021), the improved electronic payment instruments, schemes, and arrangements, PISA an oversight framework by the Eurosystem, aims at companies that enable support for e-money transfers, payment cards, digital payment tokens, and other aspects of the electronic payments sector.
Meanwhile, the new PISA framework, which was approved after a public consultation, also has cryptocurrency payment under its regulatory purview. An excerpt from the press release reads:
“The PISA framework will also cover crypto-asset-related services, such as the acceptance of crypto-assets by merchants within a card payment scheme and the option to send, receive or pay with crypto-assets via an electronic wallet.”
According to Fabio Panetta, ECB Executive Board Member, the change was necessary, considering the exponential growth of the retail payments ecosystem. The ECB official added, saying:
“The PISA framework will include digital payment tokens such as stablecoins, alongside traditional payment instruments and schemes we have gained experience in over the years. Internationally coordinated action will also have to be stepped up to cope with the challenges posed by global digital payment solutions and stablecoins.”
Companies that already come under the Eurosystem oversight, have until November 15, 2022, to abide by the new PISA framework. Meanwhile, other businesses have one year from when they receive notification about being subject to surveillance under the revamped regulatory structure.
ECB Keen on Stablecoin Regulation
The ECB announcement also said that the new PISA framework complemented the anticipated regulations on cryptocurrency assets and stablecoins proposed by the EU.
Meanwhile, Panetta’s statement comes amid the increasing regulatory talks regarding stablecoins. Back in February, the ECB asked the European Union (EU) lawmakers for veto powers on stablecoin regulation.
Earlier, the ECB argued about the use of the name “stablecoins”, stating that it was inappropriate. Later in September 2020, Finance Ministers from five EU Member States like Italy, Germany, Spain, France, and the Netherlands called on the European Commission to create strict stablecoin regulations.
According to the Finance Ministers, stablecoins should not be allowed to operate in the bloc until they meet regulatory requirements. The government officials argued that regulating the asset-backed tokens will ensure the preservation of the bloc’s monetary sovereignty, protection of consumers, and mitigate risks.
Apart from the EU, the United States has also stated that stablecoins regulation is a priority.
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