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Banking & FinanceFinTech

Fintech Insights #5 –
Reverse Solicitation in EU’s MiCA

The Markets in Crypto Assets Regulation (MiCA)1 provides the legal framework for digital asset services within the European Union. This regulation, detailed with its 149 articles and 6 annexes, mandates that entities wishing to provide digital asset services across the EU must secure authorisation in one of the EU Member States. It impacts Malta not only because of the regulation’s direct applicability but also because the jurisdiction is known for its forward-thinking stance in financial technology law due to its early implementation of the Virtual Financial Assets Act, Chapter 590 of the Laws of Malta. In this fintech insight, rather…
Mario Mizzi
14th November 2023
In this fintech insight, we provide a juxtaposition of Centralised Finance (CeFi) and Decentralised Finance (DeFi) to analyse how these two divergent notions can co-exist in the Fintech Law space.
Banking & FinanceFinTech

Fintech Insights #4 –
CeFi and DeFi’s Coexistence

The initial proponents of Decentralised Finance (“DeFi”) opined that DeFi, as opposed to Centralised Finance (“CeFi”), could innovate the financial system by providing easier methods of payments and other financial services. The reasoning was based on the notion that transactions without a centralised intermediary in the financial system entail a simpler economy with less regulatory burdens. In fact, the laws governing finance in Western countries (irrespective of their Common Law or Civilian Law traditions) are largely based on CeFi principles. In May 2023, the European Systemic Risk Board (“ESRB”), an EU body under the European System of Financial Supervision, provided…
Mario Mizzi
4th August 2023
The principle of Open Finance promotes an ecosystem where the customers of financial services allow some of their data to be utilised for the creation of more innovate financial solutions. The EU’s second Payment Services Directive (PSD2) is moving towards its third version, namely PSD3. In this insight briefing, we analyse how the proposed PSD3 could enhance the principle of Open Finance in the fintech sector.
FinTech

Fintech Insights #3 –
Open Finance in the Proposed PSD3

Open Finance is becoming a pivotal element in the evolution of the European Union's regulatory framework for payment services, most notably embodied in the anticipated Third Payment Services Directive (“PSD3”). The European Banking Authority (“EBA”) has proposed significant revisions to the current legislation, many of which aim to further the objectives of enhancing competition, facilitating innovation, increasing payment transaction security, protecting consumers, and creating a unified EU retail payments market​. The second version of the Payment Services Directive1 (“PSD2”) was last updated in 2015 and came into force in 2018. PSD2 not only offers clear guidelines to the payment service…
Mario Mizzi
24th May 2023
FinTech

Fintech Insights #2 –
Maltese EMIs

Electronic Money Institutions (EMIs) are financial institutions that offer electronic money services to customers. Legislation on EMIs is partially harmonised in the EU as there is only an Electronic Money Directive (Directive 2009/110/EC) (“EMD”) rather than a regulation. In Malta, the EMD is transposed in the Financial Institutions Act, Chapter 376 of the Laws of Malta. Article 2 of the EMD defines electronic money as “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in point 5 of Article…
Mario Mizzi
10th May 2023
In this series of briefings on financial technology law, we will share insights on the current and proposed EU laws that seek to regulate financial services being provided through digital means.
FinTech

Fintech Insights #1 –
Introductory Briefing

The progression of online financial ecosystems supporting any modern economy hinges on the citizens’ use of new financial technologies. In Malta, the word ‘fintech’ is neither defined by law nor found in the jurisdiction’s primary legislation. Yet, local stakeholders on the island commonly limit the meaning of the word to blockchain-based finance. In reality, at EU level (and to a certain extent, globally), fintech comprises all those banking and digital payment solutions which make use of the internet and other electronic means rather than using ink and paper. These include electronic money institutions, payment service providers, and banks using any…
Mario Mizzi
4th May 2023
The Parliament of the European Union has approved the ‘Markets in Crypto Assets’ regulation
FinTechLegal Updates

EU Parliament approves MiCA

The European Parliament gave its final approval to the Markets in Crypto-Assets Regulation (‘MiCA’) on 20 April 2023. The regulation forms part of the EU’s broader digital financial package whose aim is to encourage the use of fintech while ensuring consumer protection and financial stability across the EU. MiCA is the first harmonised EU framework for regulating crypto-assets and is applicable across Member States without national transposition. The regulation introduces three sub-categories of crypto-assets, namely asset-referenced tokens, e-money tokens, and other crypto-assets, which includes utility tokens and other cryptocurrencies. MiCA has three distinct regulatory regimes for issuers of stablecoins, non-stablecoins,…
Mamo TCV Advocates
21st April 2023