By Andrew Moyle, Stuart Davis, and Charlotte Collins
On 15 November 2017, the European Central Bank (ECB) published a newsletter containing an article on how the ECB is dealing with the increasing number of fintech bank applications. The ECB is the banking supervisor, alongside national regulators, for all “significant” banks authorised in Eurozone countries. As such, the ECB is involved with the authorisation of such entities.
The ECB also reports that it is in the process of implementing a fintech hub, which will serve as a central point amongst Eurozone countries for information and questions about fintech.
Acknowledging the need to balance scope for innovation against maintaining appropriate safeguards, such as adequate regulatory capital requirements, the ECB has developed a “Guide to the assessment of fintech bank licence applications”. This guide is meant to help fintech bank applicants better understand the authorisation process and the ECB’s assessment criteria.
Initial coin offerings (ICOs) involve issuers offering virtual coins or tokens that are created and disseminated using blockchain or distributed ledger technology. Virtual coins resemble cash in a number of ways but may also afford holders additional rights, such as the ability to access the platform or software, or participate in the profits, of the issuer of the virtual coins or tokens. Post-issuance, virtual coins or tokens are tradeable on a secondary market.