János Müller and Ádám Kerényi are monitoring the regulatory tasks and needs in relation to digital financial innovations, which are emerging at a revolutionary pace in the financial system.
In the digital age, it is necessary to create the conditions for competitiveness and security in the financial intermediary system. To understand this, they trace the process of how regulators move from a big bang-like market emergence through awakening and recognition to a confrontation triggering a need to act.
This is followed by the period of task definition. Effective regulation requires both an analysis of the lessons learned from the period behind us and an outline of a possible vision for the financial intermediary system. A twofold task must be carried out: competitiveness requires the smooth progress of digital development, while the functioning of the financial intermediary system must not be impaired by more favourable operating conditions for digital financial innovations.
The principle of “same activity, same regulation” needs to be enforced. Regulation must achieve a balance between these two interests, the absence of which results in regulatory arbitrage and asymmetry. Technological innovations serving payment services, artificial intelligence regulation and data protection need to be controlled. The process of searching for solutions and the desired regulation has been disrupted by the global COVID-19 pandemic, the economic and financial consequences of which have accelerated
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