eu bitcoin

The European Parliament has adopted – with some amendments – the ECON Committee’s Report on ‘Digital Finance: emerging risks in crypto-assets – regulatory and supervisory challenges in the area of financial services, institutions and markets’ (2020/2034(INL)). This is a ‘Own Initiative Report’, and as such it merely sets out Recommendations to the Commission, to which the Commission has to respond. The Rapporteur is MEP Ondřej Kovařík (Renew, Czechia).
The European Commission Executive Vice-President Dombrovskis has stated that the Commission’s Digital Finance Strategy (DFS) is in line with MEP Kovařík’s Report.

The European Parliament Report:

– Highlights concerns about the environmental impact of crypto-mining; stresses the need for solutions aimed at mitigating the ecological footprint of mainstream crypto-assets; calls on the Commission to take this into account in any forthcoming regulatory initiative.

– Proposes a single European supervisor in the following areas of crypto-asset related activities: providers engaged in exchange services between virtual currencies and fiat currencies as well as wallet providers and all other VASPs covered by FATF standards; oversight of crypto-asset related activities with a significant cross-border element.

– Calls on the Commission to establish stringent rules regarding warnings to potential clients and to make sure that competent authorities are attributed the necessary intervention powers to restrict or prohibit operations and activities in those crypto-assets that are predominantly used for illegal purposes.

– Stresses the need for all issuers of stablecoins to be legally obliged to grant the holder a direct claim and to redeem the stablecoins at par value into fiat currency at any time and to put in place adequate mechanisms for safeguarding and segregating the stabilisation reserves to this end.

– Calls on the Commission to expand the scope of obliged entities under the AML/CTF framework, in line with the recommendations of the FATF and ESMA, to ensure that all activities involving crypto-assets (providers of virtual-to-virtual exchanges, other categories of wallet providers and ICOs), are subject to the same AML/CTF obligations. Those crypto-assets which could fall under MiFID II should be treated as the other transferable securities falling under that regime.

– Suggests a pan-European open-ended taxonomy for crypto-assets.

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