The euro area’s monetary authority, the Eurosystem, has introduced a new framework for monitoring electronic payments, including services related to crypto assets. The new set of rules will complement the upcoming EU regulations for cryptocurrencies and stablecoins.
ECB strives for safe and efficient digital payments through improved supervision
After public consultations on this issue, the Governing Council adopted a new supervisory framework for electronic payments. The document was published by the Eurosystem, which consists of the ECB and the national central banks of the EU member states that have adopted the common European currency, the euro.
According to an announcement by the ECB, the Single Framework replaces other regulations within the Eurosystem’s existing supervisory system for payment instruments and complements its supervisory mechanisms for payment systems. The bank noted that as part of the effort to ensure smooth payments in the old continent, the framework is intended to “make the current and future payments ecosystem safer and more efficient”.
The Eurosystem’s “Oversight Framework for Electronic Payment Instruments, Systems and Arrangements”, also known as “Pisa”, is used to oversee facilities that enable the use of payment cards, credit transfers, direct debits, electronic money transfers and electronic wallets. The framework also applies to services that are linked to crypto assets.
The latter category includes companies that facilitate the adoption of cryptocurrencies by merchants through card payments, as well as digital wallet providers that allow users to send, receive, or pay with crypto assets through their products. Fabio Panetta, member of the ECB’s executive board, announced that the Pisa framework will also cover digital payment tokens such as stablecoins. He commented:
The retail payment ecosystem is evolving rapidly due to innovation and technological change. This requires a forward-looking approach to monitoring digital payment solutions.
The European Central Bank has pushed for rapid progress in global oversight of digital payments. “Even with the challenges of global digital payment solutions and stablecoins, internationally coordinated action must be strengthened,” emphasized the high-ranking representative of the bank.
Companies have to comply with new supervisory rules within a year
Companies currently supervised by the Eurosystem are expected to comply with the recently adopted requirements by November 15, 2022. Other companies now under supervision have a grace period of one year after being notified of their updated obligations. All traditional and crypto service providers must submit self-assessments and keep in touch with the regulators.
The new Eurosystem supervisory framework replaces a number of other documents previously issued by the ECB. The list includes the harmonized supervisory approach and standards for payment instruments (PI standards), the security objectives for e-money systems (Emsso), the supervisory framework for card payment systems, the supervisory framework for remittance systems and the supervisory framework for direct debit schemes.
The Eurosystem intends to work with other authorities in the implementation of Pisa. The framework was adopted in the run-up to the upcoming regulations on the status of cryptocurrencies and related activities within the EU, such as the proposal on the markets for crypto assets (Mica). The move is also being made in the course of the ECB to issue its own digital euro currency, after initiating the research phase of the project at the beginning of the year.
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