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Core ESBG positions on European Commission' consultation on crypto-assets
A general framework for both the definition and the classification of crypto-assets should be set-up through regulatory measures; to ensure that a scope expansion of crypto-assets is done in a harmonized manner across current legislation. Regulatory measures provide a level playing field for the market participants involved.
Furthermore, market players will need a more detailed non-legislative guidance, probably from the ESAs, including concrete examples and user-cases indicating how the different categories of crypto-assets can be classified.
ESBG believes that such classification should be flexible enough to accommodate for technological progress and that a transitional regime could enable the emergence of a detailed classification. At first, EU supervisors and NCAs need to take initiative and provide guidance, then EU legislators should enlarge the scope through a general/high level classification and finally provide those areas of the crypto-assets that do not fall under EU legislation,with regulation.
Regulatory policy should take into account the various purposes/functions of crypto-assets. Depending on the individual function/purpose of a crypto-asset, different aspects have to be considered. While e.g. payment tokens may raise questions aboutdepositor and consumer protection as well as issues related to payment services, investment tokens may raise questions about investor protection.
ESBG believes that there should be three categories: 1. Security tokens which correspond to financial instruments as defined and regulated by MiFID (keeping in mind the specific requirements of CSDR regarding listed transferrable securities); and 2. Other crypto-assets, which currently fall outside of the existing EU regulation namely: a. utility tokens b. crypto currencies.
Regarding "hybrid tokens", it is not clear if they constitute a separate category of crypto-assets. Therefore, it is important that the industry receives clear guidance from supervisors to ensure harmonization and high levels of consumer protection.
It is key to preserve recent advances and improvements achieved in market integrity, investor and data protection, and anti-money laundering, and to extend them to the crypto-assets market.
A bespoke European framework provides legal certainty and prevents a race to the bottom by regulatory arbitrage, and should guarantee a level-playing field in financial services markets.
Guiding principle same services, same risks, same rules and same supervision