Crowdfunding gives startups the opportunity to acquire small amounts of money from large groups of individuals instead of going through a traditional bank loan. The European Commission has entered into draft law a proposal to create crowdfunding "passports" to allow crowdfunding platforms to scale up in Europe. The proposal is part of increased efforts by the EU to boost growth in the fintech (financial technology) sector. A EU license would provide companies with the opportunity to find investors all over Europe, increasing their base of potential funders as well as providing one set of rules for crowdfunding platforms to comply by.
The proposal currently covers sums raised during campaigns of up to a million euros over 12 months. Campaigns that raise more will be subject to current prospectus and securities rules. On Thursday, the Commission proposed a variety of economic and job growth measures in the financial technology sector in a continued effort to decrease the level of Europe's dependence on bank funding.
The rise of technology and digital applications in sectors such as the financial industry has regulators pushing to ensure that correct measures are in place to encourage growth as well as protect both consumers and creators of these new products.
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