EU Regulators Struggle To Keep Up With Technology

On January 31, the European Supervisory Authority which oversee the European Banking Authority, The European Insurance and Pensions Authority and the European Securities and Markets Authority issued a position paper. The body issued a Joint European Supervisory Authority response to the European Commission’s February 2021 Call for Advice on digital finance and related issues.

This 109 page document outlines how the regulator is concerned with the rapidly evolving picture of distributed financial services. The regulator is used to financial transactions flowing through a manageable number of relatively centralized institutions like banks, brokerage houses, and publicly listed stock exchanges.

In the 109 page document, they don’t do much except wring their hands in worry over something that has been rapidly becoming mainstream over the past five years.

So what does this all mean? It means that the EU is playing catch-up, as are governments the world over.

We have seen governments very slow to respond to technology. It’s taken nearly three decades since the advent of the internet for governments to even figure out how to get major platforms to collect sales taxes.

It’s easy to assume that new technologies that are not covered by regulations will be exempt from regulation.