September 24, 2020, 8:50AM EDT · 2 min read
- The European Commission has today officially proposed a regulatory framework for crypto-assets and stablecoins after a leaked draft proposal went viral last week.
- The official proposal recommends a “bespoke” regime for crypto-assets and stablecoins.
The 168-page official draft proposal (provisional), published Thursday, highlights the need for a „sound“ legal framework, clearly defining the regulatory treatment of all crypto-assets that are not covered by existing EU financial services legislation.
Crypto assets, especially stablecoins, have the potential to become widely accepted, said the commission. Hence, they would be subject to „more stringent requirements“ regarding capital, investor rights, and supervision. The proposal is in line with the leaked version from last week.
The commission has today proposed a „bespoke“ regime for crypto-assets and stablecoins. „The bespoke regime for crypto-assets will ensure a high level of consumer and investor protection and market integrity, by regulating the main activities related to crypto-assets,“ said the commission. The main activities include such as crypto exchange and wallet services.
„By imposing requirements (such as governance, operational requirements) on the main crypto-asset service providers and issuers operating in the EU, the proposal is likely to reduce the amounts of fraud and theft of crypto-assets,“ said the commission, adding:
„The bespoke regime will introduce specific requirements on e-money tokens, significant e-money tokens, asset-referenced tokens and significant asset-referenced tokens in order to address the potential risks to financial stability and monetary policy transmission these can present. Finally, it will address market fragmentation issues arising from the different national approaches across the EU.“
The commission has today also proposed a regulatory sandbox to allow companies to test blockchain technology in trade and settlement processes.
The proposals are part of the commission’s newly adopted Digital Finance Package. The package will „boost Europe’s competitiveness and innovation in the financial sector, paving the way for Europe to become a global standard-setter,“ said the commission. „It will give consumers more choice and opportunities in financial services and modern payments, while at the same time ensuring consumer protection and financial stability.“