The groundbreaking proposal
In addition to the plan to extend the 4th Anti-Money Laundering Directive to include the aspect of digital currencies, the European Commission briefly presented another idea for regulation, which has not yet been discussed by the media.
It seems, however, that the Bitcoin news would be very far-reaching
The Bitcoin news announced that it is considering applying the rules on licensing and supervision of the Payment Services Directive (PSD) to digital currencies „in order to promote better control and understanding of the market“. Here is the review about the Bitcoin news.
The PSD acts as a cornerstone of European payments. It lays down regulations for payment traffic regulation and includes a corresponding catalogue of directives.
Companies offering payment services have to comply with many regulations, including licensing and supervision. It is precisely these rules that the European Commission now intends to apply to digital currencies and their exchange.
Such a plan seems to make sense. It is clear that there are two jurisdictions in the EU that would be well placed to regulate digital currencies. One is the PSD and the other is the E-Money Directive (EMD). Work on the new 3rd EMD is currently underway, so there could also be some changes there.
Revise basic Bitcoin formula assumptions
What is decisive, however, is how the regulation of the Bitcoin formula is currently structured like this: https://www.forexaktuell.com/en/bitcoin-formula-scam/ An important part of the PSD is the definition of „money“, which so far only includes cash, bank book money and e-money (regulated by EMD). Digital currencies do not fall into one of the categories – a fact that has been confirmed by the European Central Bank and other institutions.
As a result, for the European Commission, digital currencies are most likely to be regulated by the PSD guidelines, even though the PSD cannot cover digital currencies in its current form.
Accordingly, regulatory changes need to go much deeper than just adding a few regulations regarding licensing and supervision of digital currencies.
New regulations would likely lead to a rethink of the PSD’s basic assumptions, including the definition of „money“, „payment transaction“ or „payment service provider“.
How should stakeholders behave?
It is difficult to see through the European Commission’s plan as everything is still very general and vague at the moment. Be that as it may, it is likely to open the door to EU regulation of digital currency payments.
Various proposals will be made in the future. Some will provide for cautious and cautious regulation, others for stronger and more comprehensive regulation.
Companies that may be affected by these regulatory changes should monitor developments closely and be able to react quickly.