The BOF will highlight key developments of distributed ledger technology (DLT), promote European actors and reinforce European engagement with multiple stakeholders involved in DLT activities.
The BOF was launched by three Commissioners - Andrus Ansip - Digital Single Market, Valdis Dombrovskis - Financial Stability, Financial Services and Capital Markets Union, and Mariya Gabriel - Digital Economy and Society. They noted that DLT is a game changer, with a potential to be truly transformative for financial services and markets. It is expected to reduce costs while increasing trust, traceability and security.
The Commission wants the EU to be at the forefront of developments and to become a leading world region in the technology. It has been funding projects through the EU's research programmes, FP7 and Horizon 2020, since 2013. Up to 2020, it will fund projects that could draw on DLT for up to €340 million.
The Commission seeks to build on existing DLT initiatives, ensure that they can work across borders, consolidate expertise and address the challenges created by the new paradigms enabled by the technology, such as disintermediation, trust, security and traceability by design. It is intended that the BOF will play an active role in helping Europe to seize new opportunities offered by DLT, build expertise and show leadership in the field. It will gather information, monitor and analyse trends, address challenges and explore the technology's socioeconomic potential. It will enable cross border cooperation on practical use cases, bringing together Europe's various experts and stakeholders, including public authorities, regulators and supervisors.
Fintech is a policy priority of the Commission as it is expected to play a major role in achieving the objectives related to the development of the single market, Banking Union, the Capital Markets Union and retail financial services. The Commission is working on a FinTech Action Plan, which will be presented in the spring.
The inclusion of public authorities, regulators and supervisors in the BOF is an important aspects for financial services firms of all sorts. Policy-makers and regulators around the globe have been debating for some time whether existing rules are fit for purpose in the digital age. No clear conclusions have yet been drawn as to the need to re-write existing rules or to undertake a fundamental rethink of the way in which current requirements are structured. Either way, this is an area to watch closely.