EU Goes for Crypto Regulations Slam Dunk

Bitcoin Cryptocurrency EU Exchange Libra Regulation
Last updated:
Author
Author
Tim Alper
About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Ad DisclosureWe believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships.

The EU has set out plans to regulate cryptoassets, including provisions for stablecoins – with crypto exchanges active in the region required to have a physical presence in EU territories and abide by capital requirements.

Valdis Dombrovskis (on the left), Executive Vice-President for an Economy that works for People at the European Commission. Source: a screenshot, Instagram/vdombrovskis

The plan was published by the European Commission (EC), the EU’s executive body, and appears to feature most of the Financial Action Task Force (FAFT)’s recommendations for the policing of virtual asset service providers (VASPs).

The EC’s plan involves enshrining crypto regulation into law with the proposed Digital Operational Resilience Act, which it claims “aims to ensure that all participants in the financial system have the necessary safeguards in place to mitigate cyber-attacks and other risks.”

The act would require VASPs to prove they can “withstand all types of IT-related disruptions and threats.”

The EC said that its “safeguards” include the following:

  • capital requirements
  • custody of assets
  • a mandatory complaint holder procedure available to investors
  • rights of investors against issuers

And in what appears to be a thinly veiled message to the architects of Facebook’s Libra project, the EC explained,

“Issuers of significant asset-backed cryptoassets (so-called global ‘stablecoins’) would be subject to more stringent requirements (e.g. in terms of capital, investor rights and supervision).”

Larger stablecoins would be subject to European Banking Authority regulation.

Former Latvian prime minister and current Executive Vice-President for an Economy that works for People at the EC, Valdis Dombrovskis, tweeted that the move was made to minimize “risks,” claiming that the move would help “protect consumers while promoting innovation.”

“An innovative digital single market for finance will benefit Europeans and will be key to Europe’s economic recovery by offering better financial products for consumers and opening up new funding channels for companies,” he added.

However, the proposals are far from being set in stone at this point.

The EC conceded in a separate document that it will now have to “work together with legislators and the supervisory community at both European and national level.”

Bloomberg stated that the EC “plans to have a framework for cryptoassets in place by 2024.”

The EU has also announced its intentions to create new rules over the next four years that will facilitate cross-border payments using blockchain technology and cryptoassets including stablecoins.

In a statement shared with Cryptonews.com, Matthieu Saint-Olive, a global CBDC expert at ConsenSys, opined,

“It is exciting to see that the EC is taking the emergence of blockchain technology seriously. There is still a lot of work to be done, especially when it comes to designing a regulation that fosters digital innovation and embraces the new opportunities this technology brings.”

However, Saint-Olive offered a word of warning, concluding that “Europe has the potential to be a leader in blockchain transformation. Let’s not make the same mistakes as we did with the cloud transformation.”
___
Learn more:
Stablecoins May Threaten EU Market Integration And Interoperability – ECB
A New ‘Wave of Regulatory Obligations’ Over Crypto Players in EU

More Articles

Bitcoin News
Bitmain Expands Bitcoin Mining Hardware Production to the US
Ruholamin Haqshanas
Ruholamin Haqshanas
2024-12-10 12:16:13
Blockchain News
Hester Peirce Outlines Three Reforms to Bring Crypto Clarity Under Trump’s New SEC
Sujha Sundararajan
Sujha Sundararajan
2024-12-10 12:11:30
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors