Last week, the European Commission published a 2018 Fintech Action Plan. The Action Plan sets out a number of initiatives aimed at creating a "more future-oriented regulatory framework" within the EU where "innovative fintech products and solutions can be rapidly rolled out… without compromising financial stability or consumer and investor protection".

Some notable initiatives proposed by the Commission include:

  • A proposal for an EU Regulation on crowdfunding and comprehensive passporting regime within the EU for crowdfunding platforms.
  • A proposed assessment of the suitability of the current EU regulatory framework for initial coin offerings (ICOs) and cryptoassets. Based on their assessment of "the risks, opportunities and suitability of applicable regulatory framework", the Commission will "assess whether regulatory action at EU level is required". The Commission notes that cryptoassets are a "worldwide phenomenon" and observes that "international coordination and consistency, for example, within the G20, the Financial Stability Board and international financial standard setters, will be essential" in order to appropriately address this asset class.
  • The Commission will present a report on best practices for regulatory sandboxes by Q1 2019. The Commission notes that 13 EU member states currently have established "fintech facilitators" (in the form of innovation hubs or regulatory sandboxes). The Commission says it would "welcome further efforts to identify best practices across the EU and set up common principles and criteria for innovation hubs and regulatory sandboxes" which "could lead to considering an EU experimentation framework for adopting and adapting to new technologies".
  • The Commission will set up an expert group to assess by Q2 2019 whether there are unjustified regulatory obstacles to financial innovation in the EU financial services regulatory framework.
  • The Commission will host an EU FinTech Laboratory where European and national authorities will engage with tech providers in a neutral, non-commercial space with a view to building capability and knowledge.
  • The Commission has already created an EU Blockchain Observatory and Forum. This agency will report on the challenges and opportunities of cryptoassets later in 2018 and is working on a comprehensive strategy on distributed ledger technology and blockchain.

The Commission notes that the Action Plan is "one important pillar of broader strategic approach to regulation in the post-crisis environment." It states that its goals in that context are threefold – "to harness rapid advances in technology for the benefit of the EU economy, citizens and industry, to foster a more competitive and innovative European financial sector, and to ensure the integrity of the EU financial system".

The publication of the Action Plan is a very positive development for fintech innovators doing business in and across the EU.