The long-awaited Bill for the digital transformation of the Spanish financial system was approved this Thursday unanimously by Congress with 37 votes in favor and none against. The new legislation includes the creation of a regulatory sandbox for fintech innovations, among which are projects with cryptocurrencies and blockchains.
The Committee on Economic Affairs and Digital Transformation gave its approval to the project that will now go to the Senate for debate and vote. In case of amendments, the project would return to Congress for its final approval, if there are none, it will be definitively approved. By having full legislative competence, the commission gave its support without the need for discussion in the plenary of the congress.
The legislative institution explained that the measure is focused on two objectives: that the financial authorities have adequate instruments for auditing and facilitating the innovation process in the midst of a “highly competitive international technology environment”.
What the authorities are looking for is to determine the potential effects of the digital transformation on the provision of financial services and on the assets to be protected within the financial system, in particular protection of users and financial stability.
In relation to the scope that the sandbox would have and its results, Spain’s public policies point to three aspects that the congress classifies as sensitive: “the protection of personal data, the protection of users of financial services and the prevention of money laundering and financing of terrorism ”.
It should be mentioned that the project of law received, in February of this year, a first approval of the government of Spain through its council of ministers. At that time, CriptoNoticias reported that the sandbox would be coordinated by the General Secretariat of the Treasury and International Financing in conjunction with the Bank of Spain, the National Securities Market Commission (CNMV) and the General Directorate of Insurance and Pension Funds.
Sandbox of Spain and financial services
A sandbox is nothing more than a controlled testing space to present innovations in the field of financial technology, better known as fintech. It is done in this way to determine whether the projects comply with established regulations before being officially launched on the market.
Now those startups related to financial services, capital markets, insurance companies, payment means companies, personal finance, loans, blockchains or cryptocurrencies such as bitcoin (BTC), will have a place to develop their proposals for the digital transformation of the Spanish financial system .
Several fintech associations in Spain had requested in the past the acceleration of the discussions to approve the sandbox. CriptoNoticias reported in October 2019 that up to eight organizations had signed a manifesto to push for quick discussion of the law.
These associations included the Spanish Fintech and Insurtech Association (Aefi), the Spanish Blockchain Association (Aechain), the Business Ethics Observatory, the Foundation for Financial Innovation and the Digital Economy (Fifed), the Spanish Association of Startups, the Spanish Association of Company Financiers (Asset), the Association of Financial Users (Asufin) and the Cotec Foundation for Innovation.
One aspect that concerns associations is that the public bodies that will make up the sandbox must have staff trained to participate in evaluations. Simply putting the test space into operation would be a major step for Spain. However, the organizations go further and hope that the country will position itself as a “reference in the field of fintech regulation.”