The ECB is concerned about the lack of a harmonized regulatory framework governing crypto-asset activities and services in the EU. And this, while more and more banks are interested in this new class of assets.
The European Union (EU) continues to gain momentum to regulate the cryptocurrency market on the Old Continent. To do this, the European Parliament and the Council reached a provisional agreement on the MiCA (Markets in Crypto-Assets) and TFR (Transfer of Funds Regulation) regulations at the beginning of the summer to pave the way for a better framework for sector, with in particular new obligations to be respected for crypto companies such as Coinbase or Binance in order to better “protect investors”.
But behind these players, who will therefore have to obtain a crypto-asset service provider license, inspired by the PSAN regime (digital asset service provider) in France, more and more banks are also wanting to offer services in the crypto-asset market. Attentive to the phenomenon, the European Central Bank (ECB) pleads for harmonized regulations within the EU.
“There is currently no harmonized regulatory framework governing crypto-asset activities and services in the EU. This will change with the finalization of several regulatory initiatives at European and international level which will establish the wider regulatory framework within which crypto activities are permitted and how banks must manage the risks they pose.”explains the ECB.
“National frameworks governing crypto-assets diverge quite widely”
For now, the organization headed by Christine Lagarde is alarmed by the fact that “national frameworks governing crypto-assets diverge quite widely”but awaits the recommendations of the Basel Committee on banking supervision to restore order in this sector which is attracting more and more covetousness. “At the international level, the Basel Committee on Banking Supervision monitors banks’ exposures to crypto-assets and will publish its detailed rules on the prudential treatment of these exposures in due course”indicates the EU banking body.
The ECB’s desire to “ensure a consistent approach and high standards across all countries” is becoming more and more clear, as several crypto companies like Binance and Crypto.com are authorized by financial authorities in EU countries like France, Spain, Italy, Greece and even Germany. across the Rhine, “Certain crypto activities are subject to a banking license requirement and, to date, several banks have applied to be allowed to conduct such licensed activities. It is in this context that the ECB is taking steps to harmonize the assessment of license applications”specifies the organization based in Frankfurt, Germany, while the results of work carried out within the Single Supervisory Mechanism (SSM) on the digital transformation of banks are expected by the end of 2022.