[144984] in cryptography@c2.net mail archive
EU Directive makes it easier to print e-money
daemon@ATHENA.MIT.EDU (R.A. Hettinga)
Fri Oct 23 11:57:53 2009
From: "R.A. Hettinga" <rah@shipwright.com>
To: cypherpunks@al-qaeda.net,
Gold Silver Crypto <gold-silver-crypto@rayservers.com>,
Cryptography <cryptography@metzdowd.com>
Date: Fri, 23 Oct 2009 09:24:44 -0400
<http://www.theregister.co.uk/2009/10/22/e_money/print.html>
Original URL: http://www.theregister.co.uk/2009/10/22/e_money/
EU Directive makes it easier to print e-money
Out with the old
By OUT-LAW.COM
Posted in Financial News, 22nd October 2009 14:59 GMT
The E-Money Directive has failed to help establish a market for =20
virtual currency and will be replaced with a set of less onerous =20
regulations. The replacement E-Money Directive will come into force at =20=
the end of this month.
The European Council and European Parliament published the replacement =20=
Directive in the Official Journal of the European Union on 10th =20
October. It will come into force 20 days after publication and must be =20=
transposed into national law by the EU's 27 member states by the end =20
of April 2011.
The Council said that it hoped that the new Directive would address =20
the failures of the old one.
"Its adoption follows an assessment by the Commission of [the old =20
Directive] which shows that electronic money is still far from =20
delivering the benefits that were expected when that directive was =20
adopted eight years ago," said the Council when it announced the new =20
law earlier this year. "The number of newcomers to the market has been =20=
relatively low, and in most member states e-money is not yet =20
considered a credible alternative to cash."
Jacob Ghanty, an expert in finance law at Pinsent Masons, the law firm =20=
behind OUT-LAW.COM, said that the new version of the Directive lowers =20=
some of the barriers preventing companies from offering e-money =20
services.
"There was some criticism of the prudential regime of the Directive, =20
which means the amount of money you have to hold to offer services," =20
he said. "People who looked at it realised that to be an issuer you =20
were required to hold a lot of capital, which was quite onerous."
"That will now dropped from =801 million to =80125,000, which is a big =20=
dip," said Ghanty.
He said that it will align the requirements relating to e-money to the =20=
requirements that payment institutions will have to meet under the =20
Payment Services Directive, which comes into force on 1st November. =20
"It will align it with the Payment Services Directive requirements, =20
which is sensible because they are related concepts."
Ghanty said that the new E-money Directive also clears up some =20
confusion about what e-money actually is. "There were criticisms that =20=
under the old Directive the definition of what e-money is was broad =20
and vague, and that that made it difficult to determine what was and =20
was not e-money," he said.
"The new one actually simplifies the definition which makes it clearer =20=
and also makes it more capable of coping with technology advances in =20
the future," he said.
The old definition of e-money employed by the EU law actually excluded =20=
many kinds of services that service providers might have thought did =20
count as e-money.
"Quite often a client would ask 'does it amount to e-money under the =20
Directive' and we were able to conclude more often than not that it =20
didn't amount to e-money, and this was not the intention of the =20
Directive," said Ghanty. "I think the new definition will clearly =20
capture the things the Directive was intended to catch."
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