According to Reuters, the European Union (EU) is intending to develop new ways of international payments with the help of blockchain technology and crypto assets, specifically stablecoins in the next four years. By 2024, the EU will not only lead the shift from cash payments to digital finance, but also reformulate laws and policies regarding the use of crypto assets in this aspect.
“By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector. It should also address the risks associated with these technologies,” the documents said.
78% of transactions made in the eurozone are done with physical banknotes and cash and there is seemingly no need to transition towards digital payments if there is no inclination by the public to shift in the direction of innovative finance. However, the global COVID-19 pandemic has also highlighted the exigent need for digital, accessible and efficient instant payments, the EU expects that digital payments will eclipse physical cash payments by 2021.
“The principle of passporting and a one-stop shop licensing should apply in all areas which hold strong potential for digital finance,” the EU stated.
While not explicitly highlighted, moving towards digital payments will necessarily include the development and implementation of a digital currency. European Central Bank (ECB) Christine Lagarde said that the ECB is almost ready to reveal its study on a unifying digital euro for use across the eurozone.
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