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EU crypto-assets markets framework

EU crypto-assets markets framework



​​ESBG response to the European Commission consultation on a roadmap for a European framework for markets in crypto-assets​


ESBG (European Savings and Retail Banking Group)
Rue Marie-Thérèse, 11 - B-1000 Brussels
ESBG Transparency Register ID: 8765978796-80

​15 January 2020

>> .pdf version



ESBG supports the establishment of an EU regulatory framework for crypto-asset markets as a key priority; especially as crypto-assets are currently not covered by current EU-legislation. As the main features that constitute a crypto-asset are of a digital/virtual nature, relying on cryptography and use of distributed ledger technology (DLT), the question of the legal nature of the issuer (private vs. public), the difference between asset and technology, and the possible stabilisa-tion mechanisms behind the crypto-asset (e.g. in case of stablecoins) need to be considered. 

Based on the EBA and ESMA opinions, ESBG supports that the comprehensive regulatory regime for crypto-assets shall include license requirements for cryptocurrency service providers, a more comprehensive set of rules aiming at protecting ordinary consumers and investors, and the creation of an entity that is accountable to the regulator (‘scheme governance authority’).

Therefore, to address specific risks stemming from Crypto-assets, ESBG supports targeted amend-ments to sectoral legislation (e.g. Prospectus regulation, AML and/or MIFID II). Therefore, policy makers need to regulate the areas where the policy framework is still not clear or non-existent, or where it needs some sort of adaptation. As a first step, to be treated uniformly across member states, a clear definition and classification of different crypto-assets is needed. 

After this classification, an assessment must be made as to what extent the current legisla-tive framework can provide an effective set of rules for these different crypto-asset classes. Simultaneously, a narrow and restrictive definition should be avoided as this could hinder digital innovation or transformation.

ESBG is concerned by the abuse of retail investors’ trust and the emergence of highways circumvent-ing policy frameworks which were carefully crafted over the last decades. ESBG would like to make the following reflections on policy action: 

  • International coordination and consensus on policy is needed to capture risks posed by crypto-assets (e.g. in areas of financial stability, monetary policy, AML or CFT) and to ensure a level playing field across markets.

  • Market venues for virtual currencies and tokens need to be regulated; including requirements on price transparency, systems against money laundering and information disclosure. 

  • Adapting the regulatory framework for ICOs’ application, the secondary markets and the plat-forms where crypto-assets are exchanged, is of great importance in order to integrate ICOs on the diverse set of rules applying to other forms of raising capital. 

  • It is necessary to ensure a single supervisory approach on ICOs in order to guarantee the transparency of operations and the origin of funds. Regulatory uncertainty on ICOs cre-ates a regulatory limbo as new firms succeed at the expense of more regulated competitors and/or investors’ protection.  

  • The growing risks, stemming from the impact cyber-attacks can have on the ICO market, need to be addressed, for instance when a crypto exchange has their crypto-currencies stolen. 

  • The lack of clarity on which ‘white papers’ must be applied (e.g. in some cases the Prospectus Regulation may apply, but in others it may not, while sometimes even applying that Regula-tion might need an adaptation to the different technological environment). This lack of clarity often provokes non-existent due diligence performed by investors.

  • The anonymity of the wallet holders and the existence of blockchains specifically designed to ensure secrecy over the sender, the receiver and the amount transferred, create virtually risk-free ways of laundering money originating from criminal activities, or hiding the financing of terrorist organisations. EU legislators will have to find ways to ban cryptocurrencies designed to make users untraceable, and criminally sanction the malicious use of blockchain and DLT technology.

  •  ESBG also encourages EU regulators to continue identifying if other crypto-assets and ser-vices providers should be covered by the AMLD, and encourages the establishment of appro-priate instruments enabling authorities to prevent tax avoidance and tax evasion.


About ESBG (European Savings and Retail Banking Group)

ESBG represents the locally focused European banking sector, helping savings and retail banks in 21 European countries strengthen their unique approach that focuses on providing service to local communities and boosting SMEs. An advocate for a proportionate approach to banking rules, ESBG unites at EU level some 900 banks, which together employ more than 650,000 people driven to innovate at roughly 50,000 outlets. ESBG members have total assets of €5.3 trillion, provide €1 trillion in corporate loans (including to SMEs), and serve 150 million Europeans seeking retail banking services. ESBG members are committed to further unleash the promise of sustainable, responsible 21st century banking. Transparency ID is 8765978796-80.

Info@wsbi-esbg.org ■ www.wsbi-esbg.org


Published by ESBG. January 2020.






Innovation; Regulation; Payments innovation; European Supervisory Authorities (EBA-ESMA); European Institutions