Aug 24, 2020

The European Commission will propose rules for regulating crypto assets in autumn 2020

In the fall, the European Commission will finalize the regulation of the digital finance market and offer a clear definition of crypto assets for European law.

According to IFC, during the year, the highest executive body of the European Union, the European Commission, consulted with experts across Europe to develop recommendations on regulating the digital finance market. As a result of these consultations, a ′′ working paper ′′ was created with clearly defined future regulation priorities:

- Development of definitions for all types of crypto assets, including stablcoins and tokens;

- Amendment of the EU Directive ′′ On Financial Instruments Markets ′′ (MiFID II) and inclusion of crypto assets;

- Development of rules for platforms operating on blockchain.

′′We expect this law to be historic for Europe", commented on the initiative by the chairman of the European Blocktech Federation Bruno Schneider - Le Saout. ′′ This regulation will support the development of the digital finance industry in the EU for many years ".

He also noted several important changes that will occur after the new regulation:

′′The new legislation will provide the legal certainty that is necessary for crypto assets not subject to the existing EU financial services legislation, as well as for the application of DLT in financial services and tokenization of traditional financial instruments. In addition, there will be a definition of crypto assets as "financial instruments", which is crucial. It will include crypto assets in a wide range of European and national legal instruments regulating the EU financial market, especially MiFID II ".

There is also a need for strict definition and legal framework for tokens-shares. The future regulation involves creating a "sandbox" in which you can test the work of these tokens.

In addition, the developed legislation includes specific regulation of market structures for crypto assets. Currently, the work of cryptocurrency exchanges is not regulated enough, which, according to Schneider-Le South, leads to numerous frauds and exchanges.

The working paper proposes to create a regulation setting up harmonious requirements at the EU level for issuers who seek to offer their crypto assets throughout the EU and cryptocurrency service providers wishing to obtain permission to provide their services in a single market.

This regulation will replace existing national laws applicable to crypto assets. The law will include requirements for crypto asset issuers, requirements for cryptocurrency service operators, special rules for market integrity and rules for issuers supervision, along with the powers of national executive authorities to ensure market integrity.

The European Commission plans to accept the draft proposal in the third quarter of 2020 However, the press service of the executive body notes that the work of the Commission may have delays related to the coronavirus pandemic.

Recall that in June, the Vice-President of the European Commission reported that the European Union is developing cryptocurrency regulation, which will include stricter requirements for global stablcoins.

Date 24 Aug 2020

No comments:

Post a Comment