Electronic money regulations to be mitigated in Europe

New regulations were proposed by the European Commission to govern the activity of electronic money institutions across Europe. Under the draft bill mobile operators and other 'hybrid' institutions will be able to get e-money licenses. The compromise text for a new Directive has been agreed by the Committee of Permanent Representatives (COREPER) under the aegis of the Czech Presidency.

The draft Directive aims "to remove the high regulatory barriers preventing the development of an electronic money market in the European Union and to set reasonable conditions for the business operations of electronic money institutions", explained the Commission.

Among the most notable changes introduced into the draft Directive is a reduction in the regulatory burden placed on electronic money institutions and the convergence of their status with provisions on payment institutions under the Payment Services Directive. Besides, the new bill will allow the existence of hybrid electronic money institutions", that perform other activities in addition to the issuance of electronic money. Additionally it also cuts the capital for e-money issuers from the current EUR1 million to EUR350,000.

The proposal is scheduled for the approval by the European Parliament for the second half of April with formal confirmation to be made by the EU Council in May.