The EU Has Released A Study Titled ‘Competition Issues in the Area of Financial Technology’
The number of start-ups, traditional financial institutions and big tech companies involved in FinTech services has grown exponentially bringing new challenges to the space, according to a study at the request of the European Parliament Committee on Economic and Monetary Affairs. The study looks at impactors in anticompetitive behaviours, network effects, access to customer data, standardisation, interoperability and the use of algorithms. The FinTech ecosystem is still young and constantly evolving with many developments and decisions in this sector. Adoption is key to increase the potential in crypto buying.
Services offered by FinTech have huge potential benefits to European consumers impacting efficiency, cost reductions and transparency. These services are changing the way traditional financial services are provided. The study currently states, ‘no consensus on a standard classification’ and proposes categories to encompass the services provided:
- Banking – Deposits and Lending
- Payment, Transfers and Forex
- Digital Currencies
- Wealth and Asset Management
- Personal Finance
- Enabling Technologies and Infrastructure
Competition in the market arises between the digital currencies themselves also referred to as an Inter-cryptocurrency market and the exchanges, known as an intra-cryptocurrency market. Sub-markets such as mining, exchanges, wallets and payments are subject to slightly different environments and dynamics which creates competition issues. The most common factor is the presence of network effects as well as the standardisation of distributed ledger technology.
Cryptocurrencies are digital currencies that operate in a decentralised way using peer-to-peer technology without the participation or authority of a central bank. The study suggests there are three types of stakeholders developing or using this technology: start-ups and newcomers, traditional financial service providers and technology companies to provide services for customers to make a bitcoin investment. Cryptocurrency management services of companies involved include, wallet providers, crypto payments, crypto exchange and trading and mining.
With new FinTech services entering the space each day, the accessibility to buy bitcoin and make a crypto investment is becoming easier.
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