Regulating the Digital Future: A Centre–Right Approach to Crypto Assets and Digital Currencies
27 April 2022
Digital finance is now part of the financial mainstream. This paper provides recommendations aimed at making the EU a stronger global player in digital finance and digital currencies. It also seeks to place the centre–right as the key driver of this change within the European political framework. First, we argue that a carefully deliberated EU legal framework for crypto assets is both welcome and required. This framework should be based on protecting financial stability while encouraging innovation. Ensuring the ability of European citizens to have access to these digital tools and to invest based on their personal preferences is an important principle of open democracies.
Second, Europe must be at the heart of the digital currency revolution, and the European Central Bank should expedite the development of a ‘digital euro’ as a complement to traditional euro notes. This is the optimum solution to providing a secure and universally accepted digital currency. Public money must remain the linchpin of digital finance. Moreover, the framework for crypto assets should be based on key principles of the centre–right: it must be regulated, secure and credible. The centre–right should actively support the proposed Markets in Crypto-Assets (MiCA) regulation and work, across the EU institutions, towards its speedy finalisation and adoption. The principle of ‘same activity, same risk, same rules’ should remain the bedrock of the regulatory approach to crypto and digital asset classes, and to stablecoins in particular.
Lastly, the regulation of crypto assets should be part of the wider effort to reduce the fragmentation of the policy landscape within the EU. Financial technology (FinTech) products and services are rising in prominence globally, and this has direct bearing on issues related to competitiveness, digital services and cybersecurity. European policymakers should act more decisively so that the EU does not fall behind in the global FinTech race.
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