The European Central Bank (ECB) could be given greater powers on regulation of crypto assets under amendments to the European Commission’s Markets in Crypto Assets (MiCA) framework.
Proposals to grant the ECB powers to give binding opinions on white papers as well as moves towards increased alignment with existing EU financial services regulations are among amendments suggested by European Parliament Rapporteur Stefan Berger, MEP.
The GDF MiCA Working Group has analysed the Rapporteur’s amendments, as it continues to work with the European Parliament and Council as they go through the legislative process. Further amendments are to be tabled in the Parliament by 19 April.
European Commission amendments build in earlier statements
The amendments build on the original proposal published in September last year which looks to cover all crypto assets that are not covered by existing EU financial services regulation, and set out obligations for issuers and service providers.
Lavan Thasarathakumar, Head of Regulatory Affairs — EMEA at GDF and Co-Chair of the GDF MiCA Working Group, said: “The amendments are consistent with what is a strong narrative across the EU institutions at the moment of wanting to address the perceived threat of global stablecoins. However, it is important to remember that crypto assets are more than just stablecoins and we do not become blinded by this, losing sight of what is a great opportunity to create the truly all-encompassing regime that provides clarity to this innovative sector.”
Other amendments suggested by the Rapporteur include providing alternative definitions for distributed ledger technology (DLT), e-money tokens and utility tokens.
EC will also be focusing on cryptocurrency service providers
The amendments also include ensuring crypto asset service providers have systems and controls in place to comply with anti-money laundering and combating the financing of terrorism.
The GDF MiCA Working Group, set up in autumn last year, is providing detailed feedback to the European Parliament and has highlighted the need for clarity on terms and definitions used. It wants to see proportionality in creating a level playing field for crypto assets and has made operational and procedural recommendations to mitigate challenges including realistic timelines on implementation and third country access.
A recent survey of GDF members reported in the organisation’s 2020 annual report identified a lack of regulatory clarity as the biggest challenge facing the sector this year.