site.btaUPDATED Finance Minister: Bulgaria Could Become Real Sandbox for New Services in Terms of Both Accessibility and Regulatory Framework

Opening the 6th DIGI PAY conference for secure and accessible digital payments here on Thursday, Finance Minister Assen Vassilev said that if there is a place where Bulgaria can have a competitive advantage, that is to make the country a real sandbox [a financial industry term meaning a regulatory environment that keeps up with fast-paced innovation] for new services in terms of not only accessibility but also regulatory framework, i.e. what is prohibited to be allowed. He said that work is being done on the matter since 2022, including in terms of draft regulatory texts.

At DIGI PAY 2023, representatives of the sector present innovations in payments. The forum is held at Sofia's Inter Expo Center.

Addressing the forum, Finance Minister Vassilev also talked about the digital infrastructure in Bulgaria that is linked to the finance sector. In his words, there are Bulgarian companies at world level and they do not work a lot in Bulgaria not only because the market is smaller but also because the country's regulations have been lagging behind quite a lot.

He commented that the digitization process in Bulgaria is happening under certain pressure, but progress has already been made in that respect. He gave as an example the electronization of vouchers. "This is a process that in some countries has taken around ten years, while here you saw that it can be launched in pilot form for six months and be finalized for 12 months, because there is talent who can make it happen in the country," he said describing the transition to electronic vouchers. In his words, open banking too is a process that can quickly be introduced in Bulgaria and allow this country to offer more modern services on the market.

On the topic of cryptocurrencies, the Finance Minister said that from a tax point of view, in Bulgaria the new package of corresponding laws will ensure they are fully regulated. The tax will amount to 10%, he specified. From the point of view of EU law, Bulgaria is among the first to regulate income and work with cryptocurrencies, which gives legal clarity to investors, consumers, and companies offering this type of services.

The next regulation that can happen and is allowed under an EU directive is for all licensed finance companies subject to such a regime to have direct access to accounts at the Bulgarian National Bank. That means that not only banks but also all companies subject to licensing will be able to join the international payment system without having to go through commercial banks. That will allow the process to be sped up, services to be improved and most of fintech companies to have access to the payment system directly linked to the central banks of the world, Vassilev said.

MEP Eva-Maria Poptcheva of Renew Europe Group in the European Parliament said at DIGI PAY 2023 that the European financial system is vulnerable to money laundering attempts and this is evident in the context of the Russian war against Ukraine and under the conditions of the single market the turnover of "dirty" money is very quick. This calls for the need of a new European organization such as the Anti-Money Laundering Authority - AMLA. Poptcheva is a rapporteur on the case.

The authority will oversee directly over 40 of the "riskiest" financial institutions, which due to their weight can be used as an instrument in money laundering schemes.

MEP Eva Maydell of the European People's Party Group in the European Parliament said that two years after the start of the process, the negotiations on an AI Act have reached their final phase and the topic continues to divide members of the European Parliament.

As with other legislative initiatives, the EP is striving to balance the interests of consumers with stimulating innovation, Maydell assured. However, opposition in parliament on the issue ranges from calls for a blanket ban on the use of AI to demands to restrict the use of individual applications of it such as facial recognition.