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Facebook will not dictate digital finance in Europe, say S&Ds

Date

09 Oct 2020

Sections

Euro & Finance

The Socialists and Democrats voted in favour of a report aimed at regulating the use of digital finance on the European market. While acknowledging the importance of innovation in this area, the S&Ds want to make sure that financial stability, data protection and the well-being and online safety of European citizens are at the core of all developments in the field. Following the adoption of the Digital Finance Package by the European Commission, the S&Ds will make sure that that the new regulatory framework will safeguard the EU’s monetary sovereignty and address the risks to monetary policy arising from the private issuance of stablecoins like Libra, and at the same time protect EU consumers and financial stability as a whole.

Jonás Fernández MEP, S&D spokesman on economic and monetary affairs, said:

“The potential of digital finance to transform financial services and our economies is undeniable. Technological innovation gives citizens access to basic financial services and helps them conduct payments more easily, and it can also be an effective tool for European SMEs to access finance. Digitalisation can truly change financial markets, providing for more efficient capital allocation, broadening pools of capital and making markets more transparent.

“However, the potential of digital finance can only be achieved through a tailored and updated regulatory and supervisory framework. One based on trust from all operators and citizens. The S&D Group will push for strong regulation that guarantees financial stability with strong prudential requirements, protection for investors and consumers, and appropriate oversight of technological operators – for the protection of privacy and personal data, and for adequate standards to guard against cyber-attacks.”

Eero Heinäluoma, S&D negotiator on digital finance, said:

“Negotiations on this file have been lengthy, but what we managed to achieve is a great step forward for European citizens and for our Group. Digital finance is new, unchartered ground for the European market. And if we want to stay ahead of the game, strong regulation and proper supervision are needed. Striking the balance between regulation and innovation was crucial in this report.

“Digital finance will be essential to the success of the Capital Markets Union, through its potential to increase financing options for companies and citizens, as well as investment options. However, we state it clearly: progress in the field of virtual currencies and digital payments can only be done provided all money-laundering loopholes are closed and must not lead to restrictions on retail cash payments or to the abolition of cash. Finally, it is critical that no one is left behind. When we regulate digital finance, we have to look towards the most vulnerable in society, who are often digitally illiterate. A strong regulation on digital finance serves the many, not the few.”

Ismail Ertug MEP, S&D vice-president for digitalisation, said:

“A core element of state sovereignty is the issuing of a currency and we will not leave this to private companies like Facebook. Nevertheless, digital currencies can be a good alternative to existing means of payment. Unfortunately, Bitcoin and also other cryptocurrencies are primarily highly speculative gambling products. Therefore, I highly welcome regulation on digital finance and cryptocurrencies.

“A cornerstone for the European Digital Decade could be the creation of a European digital currency: e-Euro. That would be good for the European financial centre and its integration into the global financial system. It could become a user-friendly European payment solution that respects data protection and gives consumers full control over their data in a data-driven financial sector.”

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