At the tail end of 2020, the European Union (EU) Commission should complete its work on digital finance and the results will be clearly defined crypto laws helping the sector flourish.
Crypto is Here to Stay
This is according to a report published by IFCReview on Aug 20, citing previous comments by Valdis Dombrovskis, the EU Executive Vice President who had earlier explained that the lack of fitting crypto regulations disadvantages European companies.
Thrusting itself into the mainstream following the sharp expansion of price drawing interest from investors, governments, and regulators in late 2017, cryptocurrencies, analysts say, are here to stay.
The underlying technology that founds crypto is however embraced by governments. Termed as Distributed Ledger Technology (DLT), or simply, blockchain, it has found application in several sectors of the economy.
Just recently, blockchain was used in Russia during voting for a constitution amendment.
The European Union Commission Non-Paper Proposed Regulations
Following consultations with experts from last year, the EU Commission has since identified several priorities as laid out in their “non-paper.”
One of them is to differentiate types of cryptocurrencies, setting identifiers to pick out simple tokens from stablecoins. Notably, there will be spelled out methodologies for regulating tokens which are considered securities. The regulation proposes the creation of a sandbox where the activities of security tokens will be closely studied.
Positively, there are further plans for creating a single market for trading cryptocurrencies in the EU. This will however require harmonization of existing legislation.
The other is to make changes to the Markets in Financial Instruments Directive II (‘MiFID II’ Directive 2014/65/EU) to include digital assets. Lastly, they plan to build a blockchain-based regime.
The final rollout and adoption will be “historic” according to officials, stating that it will satisfactorily support crypto assets for years to come.
Notably, what these changes bring is the desired certainty needed for crypto assets to grow since some are not covered in the existing framework. Additionally, crypto assets will for the first time in the EU qualified as financial instruments consequently placing them within MiFID II reach.
Regardless, crypto regulation in the EU is dizzying. Individual countries, as naturally expected, have different attitudes to crypto assets. The adoption of non-paper’s proposals will muddy the scene for the good of crypto adoption.
As reported by European lawmakers—in a report, are calling for the creation of an anti-money laundering task force that could classify crypto mining a money-laundering activity.