On the way to PSD3: Crypto-Payments Regulatory Challenges

Abstract

The primary objective of this dissertation is to provide a comprehensive understanding of the digital payments industry in the European Union, with a specific focus on crypto-payments. Chapter I explains the mechanisms of payment systems, describes payment methods, highlights emerging payment trends, and identifies the activities performed by payment service providers. Additionally, an empirical analysis offers an informative overview of authorised payment and electronic money institutions operating in the European Economic Area, particularly in Italy. Chapter II delves into the regulatory aspects of payment services. It thoroughly analyses the Second Payment Services Directive, which plays a vital role in driving the transformation of payments towards digitalisation, especially through the introduction of open banking and strong customer authentication. Furthermore, it outlines the significant measures presented by the recently published Third Payment Services Directive. Chapter III explores the world of crypto-assets, providing insights into the functionality and transformative potential of crypto-currencies within the global financial landscape. It also investigates the classification of crypto-assets within the framework of European Union financial services law, taking into consideration the parameters set by the Payment Service Directive, the Electronic Money Directive, the Markets in Financial Instruments Directive, and the Markets in Crypto-Assets Regulation. Lastly, Chapter IV takes a closer look at how European law addresses the challenges posed by crypto-currencies. This section covers the Digital Finance Package, which includes the Markets in Crypto-Assets Regulation, the Digital Operational Resilience Act, and the Regulation on Distributed Ledger Technology Market Infrastructures, as well as the General Data Protection Regulation and the Anti-Money Laundering Directive. In conclusion, this dissertation provides an insightful exploration of the digital payments landscape in the European Union, focusing on crypto-payments and their regulatory framework. It sheds light on the evolving industry dynamics and the legal measures shaping its future.