European Central Bank approves framework for overseeing stablecoins and crypto
|- The European Central Bank has approved a framework that assesses the security and efficiency of cryptocurrency-related services.
- The bank is focused on the smooth operation of payment systems involving stablecoins and crypto-assets.
- Companies subject to the framework are expected to comply by November 15, 2022.
The governing council of the European Central Bank has approved a new framework to oversee electronic payments and make stablecoin and crypto-asset payments safer and efficient.
ECB implements PISA framework to oversee crypto asset related payments
The proposed framework- Payment Instruments, Schemes and Arrangements (PISA) includes an assessment methodology and an exemption policy. The framework covers the use of payment cards, credit transfers, e-money transfers and electronic wallets.
Fabio Panetta, ECB Executive Board member, is of the opinion that payment ecosystems have evolved swiftly. Panetta says,
The retail payments ecosystem is evolving fast owing to innovation and technological change. This calls for a forward-looking approach in overseeing digital payment solutions...Internationally coordinated action will also have to be stepped up to cope with the challenges posed by global digital payment solutions and stablecoins.
The Eurosystem is keen on cooperating with other authorities for the implementation of the PISA framework.
Companies that fall under the Eurosystem’s oversight have until November 15, 2022, to adhere to the new principles. Crypto companies and payment firms that now fall under the umbrella of the PISA framework have been notified and offered a grace period of a year before subjecting them to the same standards.
Companies are expected to submit documentation supporting their self-assessment to open a dialogue with the regulator.
Global payments giants like Mastercard and Visa have stepped up to adopt and facilitate cryptocurrency payments and transfers earlier this year. The ECB’s move comes at a time when the competition in crypto payments intensifies.
The ECB has confirmed that the PISA framework is in accordance with the European Union’s future regulation on stablecoins.
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