18.09.202012:53 Forex Analysis & Reviews: Europe's recovery plan: crypto assets to help the economy

The COVID-19 pandemic has greatly affected and damaged the health systems and economies of Europe and the rest of the world. At the end of May this year, the European Commission presented its proposals for the recovery plan, according to which the full potential of the EU budget will be used. This measure is necessary to protect lives and livelihoods, regulate the single market, and ensure sustainable recovery.

On Saturday, an informal meeting of the EU Economy and Finance Ministers was held in Berlin where the Executive Deputy Chairman of the European Commission, Valdis Dombrovskis, announced the readiness of the EU government to use crypto assets in the implementation of the recovery and economic transformation plan. He also added that the EU's financial sector should make the most of the opportunities offered by digitalization and investors should take a global-dominant position. All European consumers and industries should benefit from the digital currency, which will help minimize risks.

The updated EU Digital Finance Strategy is expected to be announced in the second half of September. The strategy aims to adjust EU regulations to the digital age which is necessary to promote innovation and contain risks. Thus, a legislative proposal regarding the crypto asset market is expected. Some ministers at the Berlin meeting were also concerned about the risks associated with "stablecoins" that do not comply with current EU rules. Dombrovskis assured that the new legislative project should solve this problem. The European Union should minimize risks when dealing with stablecoins.

Next Generation EU or "Next generation Europe" was agreed in July by EU leaders and aims to restart the EU's internal market after the pandemic. Moreover, this plan is designed to increase the competitiveness and innovation opportunities. This is a kind of financial instrument for post-crisis reconstruction, with a fund of 750 billion Euros. Brussels will acquire this money on the financial markets and include it in the Union budget, which previously consisted exclusively of contributions from EU member States.