The ECB explained that companies that are subject to its supervision must adhere to the principles of the new framework by November 15th, 2022. Christine Lagarde described the pioneering cryptocurrency as a threat, stating it contributes to money laundering and terrorism financing, among other crimes.
The European Central Bank (ECB) recently approved a new regulatory framework to supervise payments with Bitcoin (BTC) and other cryptocurrencies. They stated that it seeks to make the transactions in the crypto ecosystem secure and efficient.
At a meeting of its Governing Council, the ECB authorized the Eurosystem supervisory framework for electronic payment instruments, schemes, and agreements. PISA will replace the payment supervision regulation that has been in force since 2017. Furthermore, the ECB extended it to cryptocurrency-related systems such as cryptocurrency exchanges and digital wallets.
According to a press release by the ECB, the Eurosystem will use the new framework to monitor companies allowing or supporting digital payments. They include payment cards, credit transfers, direct debits, electronic money transfers, digital payment tokens, and electronic wallets.
The new regulatory framework proposes supervising payments with Bitcoin in commercial establishments. That would be within a card payment scheme and the option of sending, receiving, or paying with crypto assets through an electronic wallet.
Fabio Panetta, a member of the Executive Board of the ECB, said the retail payments ecosystem evolves rapidly due to innovation and technological change. He added that this requires a forward-looking approach in monitoring digital payment solutions.
Companies Have One Year to Adhere to the Framework
The ECB explained that companies that are already subject to its supervision must adhere to the principles of the new framework. They have until November 15th, 2022, when the ordinance will enter into force.
They also specified that other firms have a one-year grace period after receiving the notification that the authorities will supervise them.
They said that all supervised companies would have to submit self-assessments and supporting documentation. These would serve as the basis of a continuous dialogue between them and the supervisor.
For example, that new regulation is an additional weight for Spanish companies related to the cryptocurrency market. They now have to comply with the registration of service operators and this new ECB regulatory framework.
The ECB Is Eager to Regulate Bitcoin and Other Cryptocurrencies
The new framework demonstrates the intentions and eagerness of the ECB to regulate Bitcoin and the entire market structure. In January, the president of the Bank, Christine Lagarde, described the pioneering cryptocurrency as a threat. She considers it contributes to money laundering, terrorism financing, and other crimes.
The ECB highlighted that the authorities should track all payments with cryptocurrencies, which violates the privacy features of that new money.
Fabio Panetta of the ECB claimed that crypto assets are dangerous animals. He noted it is hard to regulate and supervise them since there is no responsible legal entity.
In an attempt to compete with Bitcoin, they have advanced the development of the digital euro, their central bank digital currency (CBDC). Analysts believe that this asset is nothing more than digitized fiat money since States regulate them.
The bank will receive advice from 30 experts in retail trade to design and distribute the CBDC. The current officials of the ECB will instruct on how the digital euro could add value to all the agents of the payments ecosystem in the region.
By Alexander Salazar
