After the Paris attacks, EU countries pledged to come together to reform data protection.
The move was driven by concern over anonymous users of financial services. Simply put, more data is needed to keep the EU safe, according to a press release from the European Commission, the Brussels-based executive body for the European Union.
#EUdatap, which stands for European Data Protection, is not hot because of the brand or company behind it (or lack thereof), but because of the insight it gives into digital innovation in European markets.
These reforms follow a hearing of the EU’s Committee on Economic and Monetary Affairs (ECON), which addressed the risks and challenges endemic of instituting a publicly traded virtual currency, as well as the impact of blockchain and distributed ledger technology.
The German MEP and committee member Jakob von Weizsäckerm reiterated the need to regulate virtual currencies, but he also warned against over-regulating the technology while it is still evolving.
Jeremy Millar, a partner at financial technology consultants Magister Advisors, argued the case further, saying that the blockchain industry is already largely self-regulating, and that building relations with Fintech companies could be more effective than enacting a slew of new rules.
The mood throughout the discussion suggested a collective consent to a “light touch” strategy in the domain of virtual currency and blockchain industry. From the European Commission press release:
“Strong reliable, consistently applied rules will make data processing safer, cheaper and strengthen people’s confidence, and public confidence in currency generates growth. Indeed, some experts estimate EU’s Gross Domestic Product growing by 4% by 2020, granted the EU successfully forms a single digital market.”
ECON issued a motion for a European Parliament resolution on virtual currencies just weeks ago, which means they tackled numerous regulatory proposals in less than one month. (The last data regulation proposal, in 1995, took five years to pass.)
To its credit, ECON noted the benefits to consumers and economic development through lower transaction costs for payments and transfer of funds below 1% using blockchain technology, compared with 2% to 4% for traditional online payment systems, and over 7% for cross-border remittance transfers.
Most importantly, the newly enacted systems could permit different types of innovative payment mechanisms, from credit cards to mobile apps, leading to a user-friendly field for startups and financial institutions.
Data is itself a currency, the European Commission noted in its release, and it has no borders. By streamlining European regulations to ensure a more efficient, trusted and real-time flow of digital currency, the European market may be headed toward a more Fintech-friendly environment. It i a welcome sign that the tragic events of Paris did not lead to simply restrictions, but rather a rethinking of Europe’s complex financial systems.Like This Post