European Central Bank approves stablecoins and crypto supervisory framework

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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 functioning of payment systems involving stable coins and crypto assets. Companies subject to the framework are expected to comply by November 15, 2022.

The board of directors of the European Central Bank has approved a new framework to oversee electronic payments and make payments in stable currency and cryptoassets more secure and efficient.

ECB implements PISA framework to oversee payments related to crypto assets

The proposed framework – Payment Instruments, Systems and Devices (PISA) includes an assessment methodology and an exemption policy. The framework covers the use of payment cards, wire transfers, electronic money transfers and electronic wallets.

Fabio Panetta, member of the ECB’s executive board, believes that payment ecosystems have evolved rapidly. Panetta says,

The retail payments ecosystem is changing rapidly due to innovation and technological change. This requires a forward-looking approach in the supervision of digital payment solutions … Coordinated action at the international level will also need to be strengthened to face the challenges posed by global digital payment solutions and stablecoins.

The Eurosystem wishes to cooperate with other authorities for the implementation of the PISA framework.

Companies placed under the supervision of the Eurosystem have until 15 November 2022 to adhere to the new principles. Crypto companies and payment companies that now fall under the PISA framework have been notified and offered a one-year grace period before subjecting them to the same standards.

Companies must submit documents in support of their self-assessment to open a dialogue with the regulator.

Global payments giants like Mastercard and Visa stepped up to adopt and facilitate cryptocurrency payments and transfers earlier this year. The ECB’s move comes at a time when competition in crypto payments is intensifying.

The ECB has confirmed that the PISA framework complies with the future European Union stable coins regulation.

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