Our Digital Finance Team interviewed on the latest FinTech Trends

Catherine Houssa, Partner in our Digital Finance Team, was interviewed on the latest FinTech trends by La Libre Belgique in a special edition dedicated to the take-off of tech in Brussels.

An opportunity to also highlight the advantages of Brussels as a set-up point for FinTechs willing to reach all of Europe.

The full article is available here.

Our Digital Finance Team has authored the Belgian chapter of Chambers’ FinTech Global Guide 2019

Our Digital Finance Team has authored the Belgian chapter of the FinTech Global Guide 2019 released by Chambers & Partners, providing practical insight on key FinTech topics, such as Payments, Open Banking, Robo-advisory and InsurTech. The guide is available here: http://bit.ly/2UfuBxy


Our Digital Finance Team hosted the Vlerick FinTech Bootcamp

Yesterday, Simont Braun’s Digital Finance Team hosted the Vlerick FinTech Bootcamp. Philippe De Prez highlighted the impact of regulation on FinTech ventures and the students had the chance to hear 8 FinTechs pitching: Ibanity, DigiTribe, Accountable, POM, Itsme Belgian Mobile ID, 0smosis and GAMBIT.

Thank you to Bjorn Cumps from Vlerick Business School and FinTech Belgium for their trust.

2019, the year of truth for open banking (RTS – SCA)


In the world of Payments and FinTech, PSD2 has been a hot topic for several years now. Last year was already a crucial year with the transposition deadline of this directive scheduled for 13 January 2018. This transposition gave rise to significant (and by now very well-known) changes such as the introduction of regulation on Account Information Services Providers (AISPs) and Payment Initiation Services Provers (PISPs), commonly referred to as Third Party Payment Service Providers (TPPs)[1].

The most important promise of PSD2, i.e. the instalment of an actual ‘open banking’ payment culture in Europe, was, however, not yet realised by this 2018 implementation.

By ‘open banking’ is meant the (forced) sharing of payment account data by so-called account servicing payment service providers (ASPSPs) with other service providers such as TPPs. These ASPSPs are very often banks[2] who will be obliged -without any contractual relationship- to open up their account data, for (usually) FinTech companies to build services around them.

This open banking principle will only go live with the entry into force of the Regulated Technical Standards 2018/389 of 27 November 2017 on Strong Customer Authentication (RTS SCA), scheduled for 14 September 2019.

Prepare for Open Banking

Prior to the entry into force of the RTS SCA, all ASPSPs (basically the banks) need to develop and implement technical solutions that will allow this open banking to take place in a secure and controlled manner. According to the RTS SCA, this should be done by putting in place a so-called ‘dedicated interface’ (which is, in practice, an Application Programming Interface or ‘API’), although also a fall back solution (or ‘contingency mechanism’) must be foreseen, whereby the TPPs can access the data through the interface used for the authentication of and the communication with the ASPSP’s payment service users. In other words: in case the API provided by a bank does not work properly, the TPPs could still access the data through the web-banking service this bank uses itself with its customers. This last technique is often referred to as ‘screen-scraping’ which is rather controversial since many banks claim this screen-scraping to pose significant security risks, as it implies that their clients need to share their security credentials (login and password) with third parties (TPPs).

The screen-scraping contingency mechanism, as proposed in the RTS, does, however, impose that measures are in place so that banks know at all times who is accessing the data (i.e. either their own customer or a TPP on behalf of this customer). This is opposed to the classic/contested way of screen-scraping where banks were under the impression that a client was logging in to their web-banking service, while in reality a TPP was accessing the data with the client’s consent (and passwords).

14 March 2019 – Intermediary deadline

Banks that want to avoid this screen-scraping technique, even only as a fall back solution, are however given a way out by the RTS SCA. But they will need to hurry.

According to article 33(6) of the RTS SCA, ASPSPs such as banks can be exempted from having to provide a contingency mechanism (screen scraping solution) under the condition that their dedicated interface solution (API) is available for testing by TPPs no later than 6 months before the entry into force of the RTS SCA, this means that banks should have their API ready for testing by 14 March 2019.

Industry experts believe this 14 March deadline to be too short for most banks to have a performing API in place since this implies also the provision of testing facilities and technical documents for the TPPs and the supervisors. As a result, those institutions will also have to deliver a screen-scraping based fall back solution (with identification function) by September 2019, which risks to slow them down even more in their API development.

The RTS aren’t technical enough…

Regulatory Technical Standards (RTS) are level 2 legislative measures as opposed to the PSD2 itself which is a level 1 legislative act in accordance with the Lamfalussy regulatory process for financial services[3].  Level 1 legislation such as the PSD2 is supposed only to set out general framework principles that need further technical implementation (through the level 2 RTS).

Part of the problem here is that the RTS SCA only cover so-called legal-technical aspects and do not impose any operational-technical standards. Chapter V on common and secure open standards of communication of the RTS SCA provides general requirements for communication and set out theoretical requirements for the common and secure open standards of communication. In practice, however, all of this is still very high level from a pure operational-technical point of view.

The RTS only impose certain requirements and finalities on the dedicated interface and the contingency matters without indicating how these results should be obtained. Although it is logic for a legislator not to impose industry standards, this could in practice, without further guidance, lead to as many different interfaces and systems as there are banks in Europe. Certain organisations such as ‘Open Banking’ in the UK and the ‘Berlin Group’ on the continent are trying to work out some sort of harmonisation throughout the sector, but do not involve all market participants which certainly poses a threat in terms of competition. There is also a concern that individual member states / supervisors will handle things differently and be either more or either less pragmatic in assessing whether certain requirements are met. Such an approach is potentially harmful since financial services are very often offered on a cross-border basis and industry players will want to avoid local adaptations to their systems.

Many questions remain unsolved

Next to this, many other questions remain unsolved. What will happen with those banks that do not have an API (and potentially also no fall back solution) in place by 14 September 2019? They will for sure be in breach of the law, but how will supervisors handle this concretely?

What about the large numbers of very small (often private) banks throughout Europe that are also subject to these rules and are facing high investment and development costs to put technical solutions in place, that are similar to those of large retail banks? We see that in this respect, the market has started developing a tendency towards the pooling of smaller players, but a lot remains unclear.

As generally known, the PSD2 rules (and thus also the open banking principle) only concern payment accounts. The Luxembourg based CJEU recently ruled that saving accounts do not qualify as payment accounts and therefore data related to such accounts does not fall under the open banking rules[4]. Banks and TPPs could still contractually decide to open this up to other data (for example on saving and security accounts). However, this could lead to situations where certain data shared through the same API falls under the PSD2 liability scheme (i.e. payment account data), while other data is not covered by this protection (i.e. data on saving and security accounts).


An interesting year lies ahead of us, but it is clear that all market participants (banks, TPPs but also supervisors) struggle with the implementation of the open banking principles. Nowadays, financial institutions are all focussing on the near future Brexit obstacle, but will soon be forced to shift, or at least divide their attention in order to tackle this highly topical issue.

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For more information, please contact Simont Braun’s Digital Finance Team (digitalfinance@simontbraun.eu).


[1] Please click here the for more information on these acronyms.

[2] Please also note that FinTech companies such as payment and e-money institutions can be subject to this.

[3] This process is entailed to provide more convergence in the national implementations and should lead to more consistent interpretation. It has been applied for major financial regulations such as MiFID, the Prospectus Regulation, Market Abuse Directive etc.

[4] Bundeskammer für Arbeiter und Angestellte v ING-DiBa Direktbank Austria Niederlassung der ING-DiBa AG (Case C 191/17) (4 October 2018)

Durable medium: Conceptual and legal harmonisation

Since the late 1990s, the Belgian legislator has been referring to the notion of ‘durable medium’ in order to indicate a bearer of information. The concept of ‘durable medium’ originally stems from European consumer law[1]. However, various definitions as well as different use cases, often in combination with a link to paper,  could be found spread across a variety of Belgian laws.

The Law of 20 September 2018[2], harmonising the concept of durable medium, should end this double shortage of legal coherence, with regard to the definition of a durable medium on the one hand and regarding its coexistence with paper on the other.

Harmonisation of the concept ‘durable medium’

The conceptual ambiguity caused by the diversity of definitions across a wide range of regulations[3] gave rise to questions on what might be considered as a durable medium, as well as to questions with regard to regulatory disclosure, the use of innovative media such as videos for that purpose and the validity of electronically concluded – paperless – contracts.

This should be solved now through the Belgian legislator’s general adoption of the European definition of a durable medium and the implementation thereof in article I.1, 15° of the Code of Economic Law (CEL), being:

“any instrument which enables a natural or legal person to store information addressed personally to the natural or legal person in a way accessible for future reference for a period of time adequate to the purposes of the information and which allows the unchanged reproduction of the information stored”[4].

The legislator adds that, in so far as these functionalities are preserved, paper or, in a digital environment, an e-mail received by the addressee or an electronic document stored on a storage device or added to an e-mail received by the addressee can be considered as a durable medium.

The general definition shall apply to any notion of durable medium in any Belgian legal or statutory provision. As a consequence, a durable medium referred to in, for instance, the Civil Code also needs to be understood in accordance with the definition laid down in the CEL.

Erasure of explicit references to paper

Before the aforementioned Law of 20 September entered into force, apart from the presence of multiple definitions, the various references to durable medium in relation to paper also caused a lack of clarity.

The legislation mentioned the obligation to provide certain documents differently, namely ‘in writing, or in another durable medium’, ‘on paper, or in another durable medium’, or simply ‘on a durable medium’. Following this recent law, these wordings have now all been modified (hence harmonised) to ‘by means of a durable medium’.

This modification was adopted throughout the Belgian CEL, the Civil Code, the Company Code, the Code governing miscellaneous duties, levies and taxes and the Social Criminal Code (as well as other laws and Royal Decrees) and will hence affect the conclusion of contracts across different sectors.

It should be noted that a durable medium and paper should both perform the same three functions, which are the following:

  1. To ensure the continued existence of the information so that it remains accessible in the future;
  2. To ensure the protection of the integrity of the information so that an identical reproduction of the information is possible and changes are prevented as much as possible;
  3. To ensure readability of the information so that the information can be read and referred to.

Paper and durable medium are therefore generic terms, forming two functionally equivalent solutions, both usable for different methods deployed in a traditional environment (on paper) or in a digital context (on ‘another’ durable medium, e.g. an e-mail).

The harmonisation of the use of the concept of durable medium led to the removal of explicit references to paper as well as to ‘another’ durable medium, which is consistent with the fact that paper is considered a durable medium and further explicit distinction appears unnecessary.

Adaptation to modern times?

The erasure of the explicit reference to written, paper documents could be seen as an attempt of the Belgian legislator to (further) enter into the digital era. Contracts are more and more concluded electronically, without information or other documents being provided in paper form. By removing any such a reference to documents on paper or in writing, there should no longer be any doubt about the possibility to use another medium as long as they respect all necessary functionalities inherent to a durable medium.

Exceptions: circumstances in which paper has the upper hand

Unfortunately, the harmonisation has not been implemented in the same way throughout all Belgian laws. In the 2014 Insurance Act for instance, the legislator maintains a reference to the provision of information ‘in paper or in another durable medium’. For the purpose concerned therein, it is, however, only permitted to provide information on a durable medium in those cases in which the consumer has ‘specifically chosen for the other medium’. Nonetheless, in practice, this specific ‘choice’ will not be a problem when the contract is concluded in an online environment.

Furthermore, a written contract will continue to be required in those cases where a judge ascertains practical barriers to meet a legal or statutory formal requirement in the context of the conclusion of an electronic contract (art. XII.16 BCEL).

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For more information, please contact Simont Braun’s Digital Finance Team (digitalfinance@simontbraun.eu).


[1] Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees

[2] Law of 20 September 2018 on the harmonisation of the concepts of electronic signature and durable medium and on the withdrawal of restrictions with regard to the conclusion of electronic contracts.

[3] Different definitions could be found in the Civil Code, in various books of the Code of Economic Law and in several other laws such as those on financial securities or on pensions and social security.

[4] In our Newsletter of February 2017 we referred to the decisions of the European Court of Justice in Content Services (ECJ 5 July 2012, C-49/11, Content Services Ltd v Bundesarbeitskammer) and BAWAG (ECJ 5 January 2017, C-375/15, BAWAG PSK Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG v Verein für Konsumenteninformation), setting out the conditions to meet this definition and with regard to the qualification as durable medium of emails and hyperlinks.

Geo-Blocking Regulation – Applicable as from 3 December 2018

It happens that traders, operating in one EU Member State, block or limit access to their websites and applications by customers from other member states who would like to engage in cross-border transactions (a practice called ‘geo-blocking’). This, together with the practice of traders applying different general conditions of access to their goods and services or with regard to the means of payment, based on the customer’s nationality, place of residence or place of establishment, forms a barrier to the free movement of goods and services throughout the EU internal market.

These practices, if not objectively justified[1], are forbidden as from 3 December 2018, the date of applicability of the EU Regulation on Geo-blocking[2].

Geo-blocking: a widespread phenomenon

The European Commission’s 2017 Study on Geo-blocking of Consumers Online[3] showed that only in 37% of all 10.537 websites assessed, cross-border shoppers were allowed to reach the last stage of the online shopping process. This means that geo-blocking, through website access denial or through rerouting the customer to the website of the (same) trader with its own Member State domain extension, was a widespread phenomenon across different countries and various sectors in EU online selling. This prevalent practice, which enhances discrimination of EU customers if not motivated by objectively justified reasons, should be brought to an end by the EU Regulation on Geo-blocking.

Forbidden practices

Online traders who offer their goods and services in the EU are now prohibited from discriminating customers based on their nationality, place of residence (in a B2C-context) or place of establishment (in a B2B-context) through the application of different access conditions concerning (i) their goods and services, (ii) their interfaces (website and apps) and/or (iii) the means of payment.

Whereas discrimination with respect to the conditions of access is prohibited, differentiation may be allowed when objectively justified. For instance, if a Belgian customer has to pay a higher price for the online purchase of goods from a Spanish trader compared to a Spanish or French customer, this differing price may be justified based on higher transportation or delivery costs.

Services explicitly excluded from the scope of the Regulation

Audiovisual services, financial services, services related to transport and healthcare and social services are excluded from the scope of this Regulation.

The specific exclusion of access to retail financial services, including payment services, implies, inter alia, that the payment initiation service provider who requires customers to submit their national personal number or their social security number is not geo-blocking within the meaning of this Regulation.

Furthermore, non-audiovisual IP protected services are only partly subject to the Regulation, as it remains permitted to apply different general conditions concerning the access to non-audiovisual services linked to content protected by IP rights (e.g. online music, e-books or software) based on the nationality or place of residence/establishment of the customer.

Notwithstanding this, these non-audiovisual services remain subject to the other prohibitions of the Geo-blocking Regulation i.e. the prohibition to block or limit access to online interfaces and to discriminate regarding the electronic payment means on the basis of the nationality, residence or establishment of the customer.

For instance, a French provider of music streaming services can prevent a Belgian resident to enjoy its services in Belgium. The Belgian customer must however be allowed to access the interface, subscribe to the service and, once he crosses the French border, enjoy the service.

Main impact of the Regulation

With regard to the access to online interfaces, the Regulation puts an end to simply blocking access as well as to rerouting customers without their prior consent, which happened frequently based on their IP addresses.

Besides that, all EU citizens should be able to have access to the same goods and services as local customers have when it concerns a sale of products without delivery, a sale of electronically supplied services or a sale of services provided in a specific physical location. Only exceptional circumstances justify different treatment based on nationality or place of residence/establishment in these cases (e.g. a legal prohibition enshrined in EU law or in the legislation of the Member State concerned which in its turn must of course comply with EU law).

Discriminatory behaviour of traders with regard to the accepted means of payment, through unjustified differentiation based on the customer’s nationality, place of residence/establishment, the location of the payment account, the payment services provider or the issuance of the payment instrument, is also prohibited.


By 23 March 2020 at the latest (being two years after the entry into force of this Regulation), the European Commission will assess whether or not the provision of non-audiovisual services linked to IP-protected content should be brought completely within the scope of this Regulation. By that same date, the Commission will evaluate all rules of the Geo-blocking Regulation.

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For more information, please contact Simont Braun’s Digital Finance Team (digitalfinance@simontbraun.eu).


[1] Following EU discrimination legislation, subjects who are protected by the general prohibition of discrimination may not experience a particular disadvantage compared with other subjects, unless that provision, criterion or practice giving rise to different treatment, is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.

[2] Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC (hereinafter the “Geo-blocking Regulation”).

[3] The EC Study on Geo-blocking looked into 143 country pairs and 8 sectors of goods and services that are most commonly purchased online in the EU. For the study’s Final Report, please see: European Commission, Geoblocking study, Final report, https://ec.europa.eu/info/files/geoblocking-study-final-report_en.

AMLD5 and Cryptocurrencies


One of the biggest threats associated with virtual currencies (or cryptocurrencies) is their potential use for money laundering and terrorist financing purposes. With the adoption of the 5th Anti-Money Laundering Directive ( “AMLD5”) on 30 May 2018, the European Union attempts, amongst other things, to address this issue.

Senders and recipients of virtual currencies can usually carry out these transactions anonymously.

Distributed ledgers (e.g. blockchains) on which these operations are carried out offer an anonymous yet (in principle) safe technical channel. There is no need to associate a specific identity to a  virtual wallet or a transaction. Technically, no prior identification is required.

Besides, virtual currency transactions are not confined to specific jurisdictions. They are accepted roughly everywhere and do not require any centralised intermediary. Having Internet access is sufficient to send virtual currencies to the other side of the world.

These features of virtual currency transactions render the control on, and the interception of, these operations particularly tricky.

This is why, since a few years already, public authorities, notably at the European level, have been feeling the need for a new regulatory approach.

In its opinion (2014/08) of 4 July 2014 on virtual currencies, the European Banking Authority (“EBA”), advocated for a whole set of measures to address the risks of virtual currencies.

These measures included for instance:

  • the compulsory creation/licencing of a “scheme governance authority” for each virtual currency which would be in charge of its integrity;
  • the extension of the market abuse and AML rules to virtual currency transactions;
  • the enactment of specific rules of conduct for market participants.

Taking into account the complexity and the highly resource-intensive nature of the proposed comprehensive regulatory approach, and the urgent need for a quick regulatory response to virtual currencies, the EBA recommended, in the short run, to extend the personal scope of the AML Directives to the virtual currencies exchange providers (the “VCEPs”), i.e. providers engaged in exchange services between virtual currencies and fiat currencies).

AMLD4 and virtual currencies

Triggered by the November 2015 Paris attacks, the European Commission proposed to amend the 4th Anti-Money Laundering Directive (the “AMLD4”) even before its transposition date (in principle on 26 June 2017[1]). Its proposal consisted of bringing the following two entities under the scope of AML rules by the beginning of 2017:

  • the VCEPs; and
  • the custodian wallet providers (the “CWPs”), i.e. entities that provide services to safeguard private cryptographic keys on behalf of their customers, to hold, store and transfer virtual currencies.

Finally, the AMLD4 was not modified prior to its transposition, notably because the EBA itself advocated for an extension of the initial deadline (to allow both public authorities and businesses to adapt) in a second opinion on virtual currencies (2016/07) of 11 August 2016.

Nevertheless, these discussions paved the way for the changes brought by the AMLD5.

Regulatory approach of the AMLD5

One of the main innovations of the AMLD5 is to give a legal definition to virtual currencies.

Art. 1, (2), d) of the AMLD5 defines a virtual currency  as “a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency, and does not possess a legal status of currency or money, but is accepted by natural or legal persons, as a means of exchange, and which can be transferred, stored and traded electronically”.

Following the abovementioned propositions, the approach of the European legislator to regulate the use of virtual currencies consisted of including VCEPs and CWPs in the list of obliged entities regulated by AML rules.

Consequently, these new obliged entities will become subject to regulatory requirements similar to those of banks, payment institutions and other financial institutions.

For instance, they will be required to implement necessary customer due diligence controls, to monitor transactions and to report any suspicious activity to the relevant national authorities (i.e. the Financial Intelligence Processing Unit in Belgium).

The new obliged entities will also be subject to a registration obligation.

Through these obliged entities, the European legislator hopes that competent authorities will be able to monitor the use of virtual currencies.

However, the EU legislator admitted that this new approach would not entirely fix the problem of anonymity attached to cryptocurrency transactions since users can still execute these transactions without VCEPs and CWPs, thereby bypassing the new regulatory framework (recital 9 of AMLD5).

Only the beginning of the virtual currency regulation?

The AMLD5 must be implemented into national law before 10 January 2020.

However, the EU legislator is already aware of the fact that this new regulatory framework will not be sufficient to tackle AML issues in relation to virtual currencies. By 11 January 2022, the EU Commission has been mandated to examine and, as the case may be, draft legislative proposals regarding self-declaration by virtual currency owners and regarding the maintaining by the Member States of central databases registering users’ identities and wallet addresses.

It is likely that, sooner than later, other European legislative initiatives will come to cover other aspects of virtual currencies, e.g. the licencing of “scheme governing authorities”, or the use of virtual currencies as payment or investment means.

Besides, it is worth noting that the Member States do not necessarily wait for European initiatives and that some (fragmented) measures have already been adopted at national levels.

For instance, the FSMA issued a ban on the sale of derivatives products whose values derive from virtual currency to retail clients.

Existing regulations could also apply to virtual currencies. Though many legal uncertainties remain, the FSMA considers that some initial coins offerings can be subject to the rules of the law of 16 June 2006 on public offers (see its Communication 2017/20 of 13 November 2017).

It is also not excluded that some virtual currencies should be considered as “electronic money” in the meaning of Directive 2009/110/EC.

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For more information on virtual currencies, ICOs, blockchain and EU legislative initiatives in these fields, please contact Simont Braun’s Digital Finance Team (digitalfinance@simontbraun.eu).

[1] Member States had committed to transposing the AMLD4 before the transposition deadline. Belgium finally transposed the AMLD4 in the law of 18 September 2017.

FinTech trends – How Belgium & Japan resemble and differ

Numerous articles compare different European countries or compare Europe and the US when it comes to financial regulation, the IPO market or the types of FinTech applications that are easily adopted (or not) by the public. We decided to take a look in a different direction and together with the Japanese law firm Keiwa Sogo Law Offices, Simont Braun’s Digital Finance team examined the FinTech trends in both Belgium and Japan. Interesting resemblances, but also surprising differences came out from this analysis and showed that there are different means to the same end, especially when it comes to payments.

Why do this?

As independent law firms, both Simont Braun & Keiwa Sogo are constantly looking for international partners of high quality to serve their FinTech clients considering international expansion. More than just acting as legal service providers, our firms want to inform their clients about interesting foreign markets. Comparing market trends between countries is one way to achieve this goal.

At first glance, it seems that both countries are facing the rise of typical FinTech activities such as crowdfunding, robo-advisory, virtual currency & payments.

Interesting resemblances

Crowdfunding in Belgium is still regulated at the national level since the EU Commission has only very recently announced its plan for European regulation. In Belgium (unlike other European countries such as France) only one type of license is available, capturing both lending- and asset-based crowdfunding platforms. Donation & reward-based platforms are considered to be falling out of the scope of financial regulation and remain unregulated.

By contrast, in Japan, three different types of crowdfunding are subject to three different regulations/license obligations:

So-called purchase-type crowdfunding (comparable to reward-based crowdfunding in Belgium with the likes of Kickstarter & KissKissBankBank) are regulated as e-commerce businesses under acts such as the Specified Commercial Transactions Act.

Investment-type crowdfunding benefits from an eased regulation to encourage platform businesses. Different license obligations apply depending on whether the platform allows the investors to obtain shares (Type 1 Small e-Offering Business license) or fund interests (Type 2 Small e-Offering Business license).

On the other hand, loan-type crowdfunding is more heavily regulated and requires both a Lending Business license and a Type 2 Financial Instruments Business license.

Robo-advisory in Belgium is regarded as regular investment advice and/or asset management activity, and its automated aspect does not trigger any specific FinTech license obligation. Companies offering robo-advisory services, depending on whether they actually provide investment services, are mostly considered to be investment firms and require either a license as an asset and portfolio management company from the FSMA, or as a stockbroking firm from the NBB, depending on which additional investment services those companies wish to offer. In case only a technical solution is provided to already regulated service providers, no specific license is required from the technical service provider. It seems that this situation is very similar to the one in Japan. If only a robo-advisory software is offered, no specific financial license is required. If, however, investment advice or portfolio management services are provided to asset managers through a robo-advisory solution, then an Investment Advisory license or an Investment Management license respectively will be required.

Striking differences

Cryptocurrency is on the rise in all parts of the world, but the regulatory approach strongly differs from one country to another. While in Belgium regulators limit themselves to pointing out the dangers related to cryptocurrencies, without regulating any of the possible business applications, Japan, driven by the € 360 million loss as a result of the Mt Gox (intermediary and exchange platform) bankruptcy in 2014, introduced, in April 2017, a Virtual Currency Exchange Business license for the matching of sales/purchase of virtual currency and proprietary sales/purchase thereof. These activities are booming with already 16 start-ups registered and many more in the pipeline.

(“Suica” prepaid e-money public transportation card)

The most tangible difference between the Belgian(/European) and Japanese landscapes is without a doubt the way Belgian and Japanese consumers pay for their everyday expenses in a physical environment. Electronic payments by debit cards have become the preferred way for Belgians to purchase goods and services in real life, while both debit and credit cards are favourite for online purchases. Payment services have also been the subject of recent European legislation such as the PSD2 opening up the European Payment landscape. Japanese consumers, on the other hand, seem to have embraced electronic money (or e-money) typically used on prepaid cards often issued by public transportation companies, but widely accepted as a means of payment. While e-money does not seem to convince Belgian consumers and European e-money legislation is clearly on the back burner[1], Japanese consumers used e-money for payment of over € 40 billion in 2016 alone. Debit cards, on the other hand, are far less popular if compared to e-money backed solutions in Japan.

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The above shows how different regulatory and cultural environments shape the services that will answer similar societal demands.

For more information on Digital Finance, FinTech and Financial Services in both Belgium and Japan, please contact Simont Braun’s Digital Finance Team (digitalfinance@simontbraun.eu) in Brussels or Kazuma Kato (kato@tyhomu.com) of Keiwa Sogo Law Offices in Tokyo.


[1] Simont Braun news of March 2018: 2nd e-Money Directive Evaluation – Too Little & Too Late?