The European Union’s banking authorities have proposed a strategy that is projected to improve the regulatory framework for the rapidly evolving FinTech industry, while expressing a reluctant attitude towards cryptocurrencies. The rules that will come into force in January will make it easier for start-ups offering traditional banking services to enter the market and begin serving customers. However, the EU banking regulatory authorities will first analyze the nature of services offered by FinTechs in order to ensure there is consistency in relevant compliance requirements.
Regulators have indeed been reluctant in introducing comprehensive regulatory framework for FinTech companies, claiming that the industry was way too small to be regarded as a serious competition to mainstream banking. Despite that, certain states have created regulatory “sandboxes”, which ensure that FinTech companies can test their newly developed products in real-life setting, without being restricted by narrow regulations. This was done in order to provide new FinTech firms an equal opportunity to enter and participate in the internal financial market and make sure that the services they provide are those of best standards.

Brussels has also recently proposed an “optional” licensing system for crowdfunding that is also supposed to make the life of FinTech firms simpler. If all the firms in the industry are under the same supervision as traditional banks, this might result in a huge mess, as despite the fact that they provide similar services, they are different by nature. However, it is true that the two actors at times unite their forces in order to develop new services, and in those cases increased monitoring would definitely be helpful. Perhaps, what we need is a revision of the existing financial regulatory framework of the EU. The relevant authorities must work on designing rules that will be technologically neutral and give a boost to rising FinTech start-ups.
What’s the deal with cryptocurrencies?

The European Union has made statements concerning its readiness to create effective regulatory environment for crypto-currencies. Nevertheless, by the end of the day words are just words: no concrete action has been taken as there is no consensus on the rules, due to the differing attitudes and approaches of various states towards the issue. The latter range from solid bans to remaining inactive and ignoring the needs of the global financial network.

While there are continuous debates concerning what should happen in the long-run, the EU’s precise short-term strategy is oriented at applying anti-money laundering and terrorist financing rules and preventing banks from storing or executing operations with cryptocurrencies. Such decision is explained by the claims that the crypto-currencies sector continues to be quite heterogenous and difficult to regulate and supervise.

Only time will show what direction will the EU regulations take in relation to FinTech and crypto-currencies industries. One thing certain, it will be difficult for the authorities to remain inactive, due to the rapid growth and development of the sectors.