The ECB wants to better regulate banks’ crypto activities
The ECB is concerned about the lack of a harmonized regulatory framework governing crypto-asset activities and services in the EU. And that, 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 at the beginning of the summer on the regulations on MiCA (Markets in Crypto-assets) and TFR (Transfer of Funds Regulation) to pave the way for a better framework for the sector, with in particular new obligations to be respected for crypto companies like Coinbase or Binance to do better “protect investors”.
But behind these players, who will therefore have to obtain authorization as a crypto-asset service provider, inspired by the PSAN (digital asset service provider) regime in France, banks are also increasingly looking to offer services to the crypto-asset market. Referring to this phenomenon, the European Central Bank (ECB) advocates for the harmonization of regulations within the EU.
“There is currently no harmonized regulatory framework governing crypto-asset activities and services in the EU. That will change with the finalization of several regulatory initiatives at the European and international level that will establish a broader 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 vary quite a bit”
The organization headed by Christine Lagarde is currently upset by the fact that “national frameworks governing crypto-assets vary quite a bit”but he is awaiting the recommendations of the Basel Committee on Banking Supervision to bring order to this sector which attracts more and more greed. “Internationally, the Basel Committee on Banking Supervision is monitoring banks’ exposure to crypto-assets and will publish its detailed rules on the prudential treatment of these exposures in due course.”indicated by the EU banking authority.
The desire of the ECB to “ensure consistent access and high standards across countries” is becoming increasingly clear, as several crypto companies such as Binance and Crypto.com are authorized by financial authorities in EU countries such as 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 carry out such licensed activities. In this context, the ECB is taking steps to harmonize the assessment of licensing requirements.”specifies the organization based in Frankfurt, Germany, while the results of the work within the Single Supervisory Mechanism (SSM) on the digital transformation of banks are expected by the end of 2022.