Recent media reports suggest a new cryptocurrency legislation for safe cryptocurrency exchange could be introduced in the EU countries. By this new legislation, under the new guidelines, Bitcoin and other digital currencies will be named monetary instruments all through Europe. This means legal cryptocurrency exchange will be more transparent than ever. Moreover, it is said that this new legislation will encourage the innovation associated to crypto and blockchains sector.
One area looking to new innovation using the blockchain is the cross-border money movement in multi-commodity trading business, which is very complex. There are a number of stakeholders, intermediaries and banks operating together to make deals happen. The supply chain deals are massive in value and happen very frequently.
“Many traditional banks have recently exited trade finance sector because it's simply too risky for them,” said Ali Amirliravi, CEO of LGR Global. “The banks that stay have no incentive to optimize the inefficient processes, that’s because as the companies are working to gather up all the required documentation and address the compliance needs, the banks are sitting back and charging interest - they actually don’t care how long it takes, it’s the trading companies that have to pay the extra fees.
"It gets even worse in what we call the 'Silk Road Countries'- the areas between Europe, Central Asia and China. Here you really see big differences within the supply chains and they also have to deal with large number of different currencies. You’ve got some companies that are using all manual, paper based processes and others that are moving into digital - there’s no standardization and that’s a real problem."
Ali Amirliravi’s LGR Global is a member of the Silk Road Chamber of International Commerce - an international association with the aim of increasing trade amongst members and states.
“These issues outlined are brought up frequently at the high-level meetings of the chamber of commerce,” said Amirliravi . “The influence of my own experience in the industry mixed with the stories of other stakeholders really pushed me to start to create end-to-end digital system. We are building a better way to do things, one that is faster, cheaper and more transparent for all parties involved. “
“It comes down to integrating new technologies in smart ways. Take my company for example, LGR Global, when it comes to money movement, we are focused on 3 things: speed, cost & transparency. To address these issues, we use leading technologies such as blockchain, digital currencies, and general digitization to optimize the existing processes.
It's quite clear the impact that new technologies can have on things like speed and transparency, but when I say it’s important to integrate the technologies in a smart way that’s important because you always have to keep your customer in mind - the last thing we would want to do is introduce a system that actually confuses our users and makes his or her job more complicated. So on one hand, the solution to these problems is found in new technology, but on the other hand, it’s about creating a user experience that is simple to use and interact with and integrates seamlessly into the existing systems. So it’s a bit of a balancing act between technology and user experience, that’s where the solution is going to be created.
When it comes to the broader topic of supply chain finance, what we see is the need for improved digitalization and automation of the processes and mechanisms that exist throughout the product lifecycle. In the multi-commodity trading industry, there are so many different stakeholders, middlemen, banks, etc. and each of them have their own way of doing this - there is an overall lack of standardization, particularly in the Silk Road Area. The lack of standardization leads to confusion in compliance requirements, trade documents, letters of credit, etc., and this means delays and increased costs for all parties. Furthermore, we have the huge issue of fraud, which you have to expect when you are dealing with such disparity in the quality of processes and reporting. The solution here is again to use technology and digitalize and automate as many of these processes as possible - it should be the goal to reduce risks and take human error out of the equation.
And here is the really exciting thing about bringing digitalization and standardization to supply chain finance: not only is this going to make doing business much more straightforward for the companies themselves, this increased transparency and optimization will also make the companies much more attractive to outside investors. It’s a win-win for everyone involved here.”
European strategy for data: What MEPs want
Find out how MEPs want to shape the EU's rules for non-personal data sharing to boost innovation and the economy while protecting privacy.
Data is at the heart of the EU's digital transformation that is influencing all aspects of society and the economy. It is necessary for the development of artificial intelligence, which is one of the EU's priorities, and presents significant opportunities for innovation, recovery after the Covid-19 crisis and growth, for example in health and green technologies.
Read more about big data opportunities and challenges.
Responding to the European Commission's European Strategy for Data, Parliament's industry, research and energy committee called for legislation focussed on people based on European values of privacy and transparency that will enable Europeans and EU-based companies to benefit from the potential of industrial and public data in a report adopted on 24 February 2021.
The benefits of an EU data economy
MEPs said that the crisis has shown the need for efficient data legislation that will support research and innovation. Large quantities of quality data, notably non-personal - industrial, public, and commercial - already exist in the EU and their full potential is yet to be explored. In the coming years, much more data will be generated. MEPs expect data legislation to help tap into this potential and make data available to European companies, including small and medium-sized enterprises, and researchers.
Enabling data flow between sectors and countries will help European businesses of all sizes to innovate and thrive in Europe and beyond and help establish the EU as a leader in the data economy.
The Commission projects that the data economy in the EU could grow from €301 billion in 2018 to €829 billion in 2025, with the number of data professionals rising from 5.7 to 10.9 million.
Europe's global competitors, such as the US and China, are innovating quickly and applying their ways of data access and use. To become a leader in the data economy, the EU should find a European way to unleash potential and set standards.
Rules to protect privacy, transparency and fundamental rights
MEPs said rules should be based on privacy, transparency and respect for fundamental rights. The frree sharing of data must be limited to non-personal data or irreversibly anonymised data. Individuals must be in full control of their data and be protected by EU data protection rules, notably the General Data Protection Regulation (GDPR).
The committee called on the Commission and EU countries to work with other countries on global standards to promote EU values and principles and ensure the Union’s market remains competitive.
European data spaces and big data infrastructure
Calling for the free flow of data to be the guiding principle, MEPs urged the Commission and EU countries to create sectoral data spaces that will enable the sharing of data while following common guidelines, legal requirements and protocols. In light of the pandemic, MEPs said that special attention should be given to the Common European Health Data Space.
As the success of the data strategy depends largely on information and communication technology infrastructure, MEPs called for accelerating technological developments in the EU, such as cybersecurity technology, optical fibres, 5G and 6G, and welcomed proposals to advance Europe's role in supercomputing and quantum computing. They warned that the digital divide between regions should be tackled to ensure equal possibilities, especially in light of the post-Covid recovery.
Environmental footprint of big data
While data has the potential to support green technologies and the EU's goal to become climate neutral by 2050, the digital sector is responsible for more than 2% of global greenhouse gas emissions. As it grows, it must focus on lowering its carbon footprint and reducing E-waste, MEPs said.
EU data sharing legislation
The Commission presented a European strategy for data in February 2020. The strategy and the White paper on artificial intelligence are the first pillars of the Commission's digital strategy.
Read more about artificial intelligence opportunities and what the Parliament wants.
The industry, research and energy committee expects the report will be taken into account in the new Data Act that the Commission will present in the second half of 2021.
Parliament is also working on a report on the Data Governance Act that the Commission presented in December 2020 as part of the strategy for data. It aims to increase data availability and strengthen trust in data sharing and in intermediaries.
Parliament is set to vote on the committee report during a plenary session in March.
A European strategy for data
Data Governance Act: European data governance
Commission approves €26 million Irish aid scheme to compensate airport operators in context of coronavirus outbreak
The European Commission has approved, under EU state aid rules, a €26 million Irish aid scheme to compensate airport operators for the losses caused by the coronavirus outbreak and the travel restrictions imposed by Ireland to limit the spread of the coronavirus. The aid consists of three measures: (i) a damage compensation measure; (ii) an aid measure to support the airport operators up to a maximum of €1.8 million per beneficiary; and (iii) an aid measure to support the uncovered fixed costs of these companies.
The aid will take the form of direct grants. In case of support for the uncovered fixed costs, aid can also be granted in the form of guarantees and loans. The damage compensation measure will be open to operators of Irish airports that handled more than 1 million passengers in 2019. Under this measure, these operators can be compensated for the net losses suffered during the period between 1 April and 30 June 2020 as a result of the restrictive measures implemented by the Irish authorities in order to contain the spread of coronavirus.
The Commission assessed the first measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union and found that it will provide compensation for damage that is directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the compensation does not exceed what is necessary to make good the damage. With regard to the other two measures, the Commission found that they are in line with the conditions set out in the state aid Temporary Framework. In particular, the aid (i) will be granted no later than 31 December 2021 and (ii) will not exceed €1.8 million per beneficiary under the second measure and will not exceed €10 million per beneficiary under the third measure.
The Commission concluded that both measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the three measures under EU State aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.59709 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.
Aviation: Slot relief enacted
Following a proposal by the Commission from December 2020, the Council has adopted the amendment to the Slot Regulation that relieves airlines of airport slot-use requirements for the summer 2021 scheduling season. The amendment allows airlines to return up to half of the airport slots that they have been allocated before the start of the season.
Transport Commissioner Adina Vălean said: “We welcome the final text of the amendment which allows to better adjust slot rules to consumer demand for air travel, fosters competition and sets the path for a gradual return to normal rules. I expect that this initiative will incentivise airlines to make efficient use of airport capacity, and that it will ultimately benefit EU consumers.”
The Commission has delegated powers for one year after the amendment enters into force, and so can extend the rules until the end of the summer 2022 season, if necessary. The Commission may also adapt the use rate within a range of 30-70%, depending on how air traffic volumes evolve. The legal acts will be published in the EU Official Journal in the coming days and enter into force the day after their publication. You will find more details here.
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