The EU has set out plans to regulate cryptoassets, including provisions for stablecoins – with crypto exchanges active in the region required to have a physical presence in EU territories and abide by capital requirements.
The plan was published by the European Commission (EC), the EU’s executive body, and appears to feature most of the Financial Action Task Force (FAFT)’s recommendations for the policing of virtual asset service providers (VASPs).
The EC’s plan involves enshrining crypto regulation into law with the proposed Digital Operational Resilience Act, which it claims “aims to ensure that all participants in the financial system have the necessary safeguards in place to mitigate cyber-attacks and other risks.”
The act would require VASPs to prove they can “withstand all types of IT-related disruptions and threats.”
The EC said that its “safeguards” include the following:
- capital requirements
- custody of assets
- a mandatory complaint holder procedure available to investors
- rights of investors against issuers
And in what appears to be a thinly veiled message to the architects of Facebook’s Libra project, the EC explained,
“It is exciting to see that the EC is taking the emergence of blockchain technology seriously. There is still a lot of work to be done, especially when it comes to designing a regulation that fosters digital innovation and embraces the new opportunities this technology brings.”
However, Saint-Olive offered a word of warning, concluding that “Europe has the potential to be a leader in blockchain transformation. Let’s not make the same mistakes as we did with the cloud transformation.”
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