EU Parliament Pushes for Stronger Digital Finance Amid Foreign Infrastructure Concerns

The European Parliament is urging the EU to strengthen its digital finance by reducing dependence on foreign infrastructure and maintaining investment and technological development within the continent.

The resolution calls for a predictable and innovation-friendly regulatory environment to ensure that businesses, investment, and technological development remain in Europe, while also promoting harmonized frameworks for developing new digital financial services.

Tokens and stablecoins are key pillars of this strategy. Tokenization converts traditional financial instruments into digital assets, recorded on a shared ledger for faster, more transparent transactions. The Markets in Crypto-Assets Regulation (MiCA) divides stablecoins into two categories: asset-referenced tokens and e-money tokens pegged to the euro.

The resolution stresses that digitizing an instrument does not change its legal nature, and holders of tokenized securities must have the same rights as traditional investors. Tokenization can make capital markets more efficient, lower operating costs, increase transparency, and facilitate cross-border investment.