European Authorities Propose Unitary Regulation for Cryptoactives
The European Securities and Markets Authority consider two different categories of cryptoactives to be regulated: financial and non-financial
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) are urging the member states of the European Union (EU) to create a unified cryptocurrency regulation to be applied in that region, according to a statement issued by these organizations, last 9th of January.
EBA published the information in a press release, where it confirmed that there are differences between the financial and state representatives of the EU in terms of how to regulate cryptoactives. This situation has not allowed achieving a unitary regulatory approach which contemplates the supervision and use of cryptocurrencies in the member countries.
This clash of visions regarding cryptoactives is observed both in the United States and in the European Union. Ardo Hansson, Governor of the Central Bank of Europe, said cryptocurrencies are “fairy tales” and a “financial bubble”, while months ago the Center for Social and Economic Research of the European Union said that economists should not discredit cryptocurrencies.
In response to these discrepancies, EBA stressed that
The authority considers that the use of cryptoactives in Europe is only for some people and that the evolution of the cryptocurrency market needs a mid-term review, to legislate on purse developers, exchange houses and custody firms.
For these reasons, and while the legislation agreements are reached, EBA will take a position of monitoring and advising the cryptocurrency market. Among its decisions, the European Commission is requested to convene its member states to regularize operations with cryptocurrencies, covering, as far as possible, all visions or their most important points.
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The European Securities and Market Authority (ESMA) also recommend that European Union institutions conducted a new regulatory approach in the cryptocurrency sector.
The authority indicates that there is a group of cryptoactives that are recognized as “financial assets”. For these ones, European financial laws for markets and commercial assets that include anti-money laundering measures and KYC may apply.
“Our survey of NCAs (European Competent Authorities) highlighted that some cryptographic assets may qualify as financial instruments, in which case the full set of financial rules of the European Union would apply. However, because the existing rules were not designed with these instruments in mind, the NCA faces challenges in interpreting the existing requirements and certain requirements that do not adapt to the specific characteristics of the cryptoactives”, Steven Major, Director of ESMA, said.
The institution explains that there is a second large group, the “financial non-financial”, among which are the private currencies and tokens to access services and goods. European laws do not cover these categories, which is why ESMA considers that it should start regulating this sector to avoid money laundering cases. According to the institution, one way to achieve this is to incorporate new financial legislation to the existing ones.
The European Banking Authority (EBA) issued a report on the “applicability and suitability of European Union legislation to cryptoactives”, which highlights various measures for this 2019. The institution made some recommendations in its latest report, in which the need for further investigation of cryptocurrencies is highlighted.
Regarding its next actions, the report reads: “EBA will continue to examine the need to adopt new measures within the scope of its legal competences and is willing to support the European Commission in relation to any further analysis of the issues that arise in relation to with the cryptoactive ones”.
By María Rodríguez