At the operational level, dematerialization and, in particular, the dematerialization of currency has been widely addressed in the European legal environment (see Consob, La portabilita’ dei dati in ambito finanziario. Quaderno FinTech, n. 8, April 2021, edited by A. Genovese and V. Falce and, more specifically, O. Borgogno et al., Le piattaforme finanziarie e le aree di articolazione del FinTech, ibidem, 145 ff.). The increasing adoption of digital currencies, and their associated technologies (such as smart contracts) will continue to accelerate the trend of dematerialization, and open up new market mechanisms for the exchange of goods and services.
Considering the gold standard was abolished in only 1971, the transformation of economic and social conditions have reached a remarkable stage of development in terms of technology for payment instruments. The Payment Services Directive 2 ("PSD2") introduced in 2015 was not one of the very many normative acts of a technical nature, which at different levels the national and supranational legal systems continually promulgate, but rather the first step in making customer data available among the various players in the banking sector (i.e. banks and other entities operating in the sector such as payment providers).
Indeed, PSD2 ensures both a sufficient degree of customer data protection and the possibility for banks and providers to exchange information so that the customer can be better profiled and, at the same time, have a single channel for digital payments. The result is the beginning of a real competitive struggle in the payment services industry, and it has unlocked significant innovation.
In the highly regulated banking field, there are multiple reasons that led to the approval of a new European framework for payment systems and the general content of PSD2, thus dictating precise provisions to govern the entry of new intermediaries into the market and regulating the services they offer. Fundamentally, the establishment of the single digital market was conceived and continues to be pursued, through a series of directives linked by the purpose and vision of strengthening European integration by achieving a single market. It promotes competition and innovation so as to bring better services for customers. In other words, the goal behind the introduction of PSD2 was to modernize the market for payment systems, making the related instruments cheaper, more efficient and safer, and at the same time, to ensure free market competition. Moreover, the Third Party Providers who interpose themselves in the relationship between the bank and the consumer, are also subject to regulation.
And so, by analogy and "a fortiori," it seems fair to assume that if PSD2 applies to a sector as regulated and as delicate as banking and, again, to third party providers, then, a fortiori, it should apply to a sector that is so simplified and that does not require an equal level of attention to consumer protection "without specific expertise" and where there is no need to preserve the sound and prudent management of the market as a whole.
The Voluntary Carbon Markets are characterized by inefficiency and opacity, conditions which arguably favor incumbent market participants. The introduction of Web3 technologies has offered a novel mechanism for the Voluntary Carbon Markets to scale, in-line with the amount required for them to meaningfully play a role in closing the emissions gap between the forecasted global emissions pathway, and of that which is required to avoid the worst impacts of global warming. The impact of this new technology has been significant, driving unprecedented growth and transparency for the market.
Recent discourse within the VCM however, leads one to infer that specific third-party providers within the market may be picked by the established carbon registries to facilitate the trade and exchange of carbon credits. The technology used by the chosen third-parties appears to be leveraging many of the learnings from the Web3 organizations who have demonstrated the role that new technology can play in the market.
The Voluntary Carbon Market – and those who carry influence within it – may do well to consider the benefits that a more open and liberalized market can bring to such an important and burgeoning market.
Avv. Giorgio Alessandro Donà Danioni