According to a press release by the ECB, the update in the payment instruments, schemes, and arrangements (PISA) oversight framework would enable support for e-money transfers, payment cards, digital payment tokens, and other aspects of the electronic payments sector.
“The PISA framework will also cover crypto-asset-related services, such as the acceptance of crypto-assets by merchants within a card payment scheme and the option to send, receive or pay with crypto-assets via an electronic wallet.” the ECB stated in its press release.
ECB Executive Board Member Fabio Panetta further noted that such a change is mandatory since the crypto sector experienced exponential growth, which also got into retail payments.
“The PISA framework will include digital payment tokens such as stablecoins, alongside traditional payment instruments and schemes we have gained experience in over the years. Internationally coordinated action will also have to be stepped up to cope with the challenges posed by global digital payment solutions and stablecoins.” Panetta added.
The new framework update comes as a complementary measure to the much-anticipated broader crypto asset and stablecoin regulatory framework proposed by EU lawmakers. Stablecoins, however, is a hot topic among lawmakers. The case with stablecoins like Tether and the European Union dates back to September 2020, when Finance Ministers from five EU Member States - Italy, Germany, Spain, France, and the Netherlands, asked the European Commission to create strict stablecoin regulations.
Nevertheless, the ECB called on a veto on the stablecoins regulations, arguing the name of the fiat-backed cryptocurrencies with the thesis that stablecoins are a matter in ECB’s competence.
“Where an asset-reference arrangement is tantamount to a payment system or scheme, the assessment of the potential threat to the conduct of monetary policy, and to the smooth operation of payment systems, should fall within the exclusive competence of the ECB.” the ECB noted in February 2021.
Meanwhile, the Finance Ministers of the five EU member-states jointly stated that stablecoins must meet the strict regulatory requirement before allowing them to operate inside the EU, as regulating the asset-backed tokens will ensure the preservation of EU’s monetary sovereignty, protection of consumers, and mitigate any risks involving their usage.