Today, departing Finance Commissioner Dombrovskis presented a legislative package on the digitalization of the financial system. This includes in particular a new strategy for payment services and a legislative proposal for the digital resilience of the financial sector. The legislative proposals for the regulation of crypto-assets in particular had been long awaited.
The proposals stipulate that all crypto-assets which are currently not covered by existing financial market regulations will in future fall under the new law on the markets for crypto assets, or MiCA for short. This law places requirements on the issuers of crypto-currencies as well as on service providers such as exchanges or depositaries. A separate legislation sets the framework for so-called stablecoins such as Facebook’s currency project Libra.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“With their fascinating technology, crypto-assets have the potential to make financial services faster, more practical and cheaper. The markets for regulated crypto-assets, which the EU Commission describes in its legislative proposal, are therefore an exciting vision for the future. But the legislative proposals address only insufficiently the problems with Bitcoin & Co. that already exist in reality today. While the Commission imagines the digital financial markets of tomorrow, it closes its eyes to the criminal use of existing crypto currencies and their often horrendous ecological footprint. Bitcoin thus remains a regulatory taboo.
The EU Commission is right in its objective to consistently subject crypto assets which work like classic financial products to the existing rules. Targeted adjustments to financial market legislation must ensure that such crypto-assets do not fall outside the regulatory framework for formal reasons. Neither preferring nor discriminating against crypto-assets compared to conventional financial services is the right way forward.
The elephant in the room is Bitcoin & Co. Fully decentralized crypto-currencies without issuers or responsible persons will probably not fit into the new regulatory framework. At the end of a transition period, European crypto service providers would probably be prohibited from handling such crypto currencies. But these will not simply disappear into thin air! It remains unclear how providers from outside the European Union are to be prevented from undermining the European rules. Above all, an answer to the question how the criminal use of Bitcoin & Co. is to be fought effectively is missing in today’s proposals. We need swift tightening of the rules on money laundering and mandatory customer identification.”
P.S.: Italian-German webinar on “Funding the Corona Recovery by curbing tax dumping and money laundering” with Finance Ministers Scholz (Germany) und Gualtieri (Italy) on Wednesday, 30.9.2020 7-8pm CEST. Register here: https://us02web.zoom.us/webinar/register/WN_Tt9-EIA_Q9-1eC_QetcPCg