This dissertation assesses the European initiative in regulating the FinTech
phenomenon. In 2008, a dark year of global instability, where governments and
businesses sought frantically to salvage a financial system seemingly on the verge of
collapse, one figure working in the shadows was igniting a personal revolution. On 31
October 2008, a mysterious self-declared anarchist using the pseudonym “Satoshi
Nakamoto” published his Bitcoin White Paper, declaring war on financial institutions.
The death of Bitcoin, derided as ‘the greatest bubble in the history’ on numerous
occasions, has been frequently prophesied and yet has not occurred. The intervening
years have established that the Bitcoin concept was, in fact, a revolutionary one with
remarkable staying power. From this first nudge in 2008, after a period of incubation,
FinTech began to grow rapidly in 2014, and the first flurries swiftly became a blizzard
of innovation.
From that point onwards, the EU has been trying to become a FinTech hub and
subsequently a leader of the financial market. However, the EU approach to this race
demonstrates the challenges involved. The strategic decision was to adopt a cautious
wait-and-see approach, while in the meantime launching public consultations and
seeking recommendations and guidance in the hope to figure out the way forward. In
September 2020, the announcement of the Digital Finance Package which covered
multiple dimensions of the FinTech phenomenon and most importantly crypto-assets,
took place.
FinTech remains a mystery for many of us, even today; therefore this paper
begins with introducing FinTech to the reader by exploring its core content, providing
definitions and presenting real life examples. The second chapter delineates the
FinTech phenomenon, as it developed within the EU. The relationship between the
financial system and regulation is initially illustrated. Following, the regulatory
measures announced on behalf of the European Commission are presented.
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