Explanatory Memorandum to COM(2023)368 - Provision of digital euro services by payment services providers incorporated in Member States whose currency is not the euro - Main contents
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| dossier | COM(2023)368 - Provision of digital euro services by payment services providers incorporated in Member States whose currency is not the ... |
|---|---|
| source | COM(2023)368 |
| date | 28-06-2023 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
This proposal complements Regulation (EU) No (XXX/XXX) establishing the digital euro with respect to digital euro services provided by payment services providers incorporated in a Member States whose currency is not the euro. Regulation (XXX/XXX) establishing the digital euro is addressed to Member States whose currency is the euro. To ensure that the provision of digital euro services by payment service providers incorporated in a Member State whose currency is not the euro in the euro area is adequately supervised by competent authorities of the Member State whose currency is not the euro, it is necessary to lay down rules that will apply to these payment service providers. Rules governing the accesss to and use of the digital euro in Member States whose currency is not the euro are contained in Article 18 of Regulation (EU) No (XXX/XXX) on the establishment of the digital euro.
• Consistency with existing policy provisions in the policy area
This Regulation is consistent with Directive (EU) 2015/2366 of the European Parliament and of the Council of 15 November 2015 on payment services in the internal market, as amended by Directive (EU) XXX/23. The Payment Services Directive provides for harmonised rules governing the free provision of payment services across the Union and should also apply to payment transaction in digital euro. In particular, this Regulation will allow payment services providers incorporated in a Member States whose currency is not the euro to offer to residents of the euro area digital euro payment services together with other payment or banking services, by means of free provision of services or free establishment.
• Consistency with other Union policies
This Regulation is necessary to avoid any fragmentation within the internal market, as all EU payment services providers, irrespective of where they have been licensed, should be in a position to provide similar services to best serve businesses and people.
This Regulation is consistent with the Digital Finance and Retail Payment Strategies1 of the Commission. That communication emphasised that a digital euro would act as a catalyst for innovation in payments, finance and commerce in the context of ongoing efforts to reduce the fragmentation of the EU retail payments market. Payment services providers wherever incorporated in the Union should therefore distribute digital euro services so that a high level of competition across payment services providers is ensured.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
This Regulation is based on Article 114 TFUE, the same as Directive (EU) 2015/2366. By governing the distribution of digital euro services by payment services providers incorporated in a Member States whose currency is not the euro, this proposal will secure the free movement of payment services across the Union. This proposal will ensure that payment services Providers wherever incorporated in the Union would be subject to similar requirements and supervisory standards which is necessary for the purposes of safeguarding financial stability and guaranteeing a level playing field across payment services providers.
• Subsidiarity
This Regulation would make applicable the relevant provisions of the Regulation (EU) No XX on the establishment of the digital euro to PSPs incorporated in Member States whose currency is not the euro. Regulation (EU) No XX on the establishment of the digital euro is based on Article 133 which is an exclusive competence of the Union.
In addition, given that the objective pursued by the proposed measures aim at ensuring that existing Union legislation, based on Article 114 TFUE, will be applicable with respect to the provision of digital euro services by payment services providers incorporated in Member States whose currency is not the euro, this can be best achieved at EU level rather than by different national initiatives.
• Proportionality
This Regulation is necessary to prevent obstacles in the internal market, between payment services providers incorporated within and outside of the euro area. The obligations contained in this Regulation are similar to the ones laid down in the Regulation establishing the digital euro, and are in line with the principle of proportionality for the reasons set out in the explanatory memorandum accompanying that proposal.
• Choice of the instrument
A Regulation is the appropriate instrument to contribute to the creation of a single rulebook, having general application and being binding in its entirety and directly applicable in all the Member States, thus removing the possibility of differences in application in the different Member States.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
This proposal is based on the ex-post evaluations, stakeholder consultations and impact assessment carried out in the context of the preparation of the proposal for a Regulation on the establishment of the digital euro. The impact assessment of the proposal for a Regulation on the establishment of the digital euro was submitted to the Regulatory Scrutiny Board (RSB) on 14 October 2022 and approved on 25 April 2023.
For consistency reasons with the Payment Services Directive, all EU payment services providers should have the right to distribute digital euro payment service in the euro area. This will further contribute to an innovative and competitive retail payment market.
In terms of fundamental rights, this proposal specifically ensures that the payment services providers incorporated in a Member States whose currency is not the euro benefit from the freedom to conduct a business (provision of digital euro services) under Article 16 of the Charter of Fundamental Rights of the European Union. Respect of other fundamental rights are further specified in the explanatory memorandum of the proposal for a Regulation on the establishment of the digital euro.
4. BUDGETARY IMPLICATIONS
This Regulation has no budgetary implications.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The objective of ensuring that the central bank issued money, the euro, can support the EU by meeting the payment needs in the digital age can be monitored on an ongoing basis based on data from the payment services providers, merchants and the European Central Bank. The total number and volume of retail payments in digital euro and their relative share as compared to other payment means could be the main indicators in monitoring the use of digital euro in the digitalized economy of the EU.
The proposal includes a general plan for monitoring and evaluating the impact on the specific objectives, requiring the Commission to carry out a first review three years after the date of application of the Regulation (and every three years thereafter), and to report to the European Parliament and the Council on its main findings. The review is to be conducted in line with the Commission’s Better Regulation Guidelines.
• Detailed explanation of the specific provisions of the proposal
Subject matter (Article 1)
The purpose of this Regulation is to lay down rules concerning the specific obligations that payment service providers incorporated in Member States whose currency is not the euro shall respect when distributing the digital euro and the supervision and enforcement of those obligations.
Distribution of the digital euro (Article 3)
Without prejudice to Chapter V of the Regulation (EU) No (XXX/XXX) on the establishment of the digital euro governing the access and use of the digital euro outside the euro area, the provision of digital euro services by payment service providers incorporated in Member States whose currency is not the euro should be primarily aimed to (i) natural or legal persons residing or established in the Member States whose currency is the euro, (ii) natural or legal persons who opened a digital euro account at the time they resided or were established in the Member States whose currency is the euro, but no longer reside or are established in such Member States, (iii) visitors subject to the conditions laid down in Article 20 of the Regulation establishing the digital euro.
Payment service providers authorised outside the euro area may provide those services by means of free establishment or free provisions of services under Directive 2015/2366.
Applicable law and competent authorities (Articles 4 to 6)
Article 5 clarifies that Directive (EU) 2015/2366 of the European Parliament and of the Council, of 25 November 2015, on payment services in the internal market, as amended by Directive (EU) [please insert reference - proposal for a Directive of the European Parliament and of the Council on payment services and electronic money services in the internal market amending Directive 98/26/EC and repealing Directives 2015/2366/EU and 2009/110/EC - COM(2023) 366 final] applies to the digital euro. That Directive provides that central bank money issued for retail use, and not only banknotes and coins should be considered as ‘funds’ within the meaning of that Directive. Likewise, the anti-money laundering and counter-terrorism financing (AML/CFT) framework laid down in Directive (EU) 2015/849 of the European Parliament and of the Council, of 20 May 2015, on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and Regulation (EU) 2015/847 of the European Parliament and of the Council of 20 May 2015 on information accompanying transfers of funds should apply with respect to the digital euro.
Payment services providers incorporated in Member States whose currency is not euro may distribute the digital euro, subject to the supervision and sanction regimes of Member States whose currency is not the euro.
While competent authorities under Directive 2015/2366 and Directive 2015/849 would be responsible for supervising and enforcing any obligations laid down in these Union Acts, based on Article 114 TFUE, the same competent authorities would also be responsible for ensuring respect of the relevant provisions of the Regulation establishing the digital euro as specified under this Regulation.
Supervisory arrangements between the competent authorities of the home Member State and the competent authorities of the host Member States laid down under Directive 2015/2366 and Directive 2015/849 should also apply with respect to the digital euro.
Final provisions (Articles 8)
The Regulation should enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.