As we know, rules may be needed to protect investors and evangelists from crypto-asset risks, prevent money laundering and stop diverging national regulations from creating unfair competition. In this regard, two major European regulators have separately called for cryptocurrency and ICO rules at the EU level.
The European Banking Authority (EBA) said in a report on crypto-assets that they typically “fall outside the scope of EU financial service regulation,” making it harder to build a detailed picture and have identified financial institutions making a market in them by lending against crypto-asset collateral, and exchanging crypto-assets for cash.
Adam Farkas, the EBA’s executive director, said in a statement:
“The EBA’s warnings to consumers and institutions on virtual currencies remain valid. The EBA calls on the European Commission to assess whether regulatory action is needed to achieve a common EU approach to crypto-assets. The EBA continues to monitor market developments from a prudential and consumer perspective.”
The EBA has advised the commission to consider the recommendations that will be issued by the Financial Action Task Force(FATF) in June this year.
The FATF, the global money-laundering watchdog, will issue guidance for international cryptocurrency regulation covering crypto exchanges, digital wallet providers and initial coin offerings (ICOs).
Throughout this year, the EBA has committed to take a number of steps to monitor the crypto sector, such as developing a common monitoring template for crypto activities, assessing business practices regarding advertisements in the industry, determining the treatment of banks’ holdings or exposures to crypto assets, and more.
A second regulatory agency in the economic block named the European Securities and Markets Authority (ESMA), also published a report on crypto assets and ICOs today. It advises the EU’s Commission, Council, and Parliament on the existing rules that could be applied to crypto-assets and further sets out any regulatory gaps to consider for policymakers.
However, the EU reports make scant mention of purported benefits of crypto-assets and blockchain technology, seeing mostly risks —for regulators, investor, and markets. On the flipside, U.S. regulators have been more open to the blockchain technology on which crypto-assets rely.
Link to the original news article can be found here.