European Financial Authorities Push For New Cryptocurrency Regulations
The European Banking Authority believes it is high time the European Union came out clear on the regulatory framework pertaining to crypto assets. Current policies and regulation applicable in the financial sector fall outside the scope of cryptocurrencies. That said consumers remain exposed given the lack of clear set out regulatory policies for digital assets.
EU Crypto Regulation Push
Concerned by the potential risks in the crypto markets, The European Bank Authority is urging the European Union to carry out an in-depth analysis of the burgeoning yet risky sector. The review according to the financial regulator should focus on the cost benefit as well as risks posed by cryptocurrencies, both inside and outside the mainstream financial sector.
According to the EBA director, Adam Farkas, it is high time the European Commission came out clear on whether a common regulatory framework on cryptocurrencies is needed on crypto assets. The European Securities and Markets Authority seems to share similar sentiments.
The ESMA on its part maintains that the European Union needs a common approach to crypto assets as a way of ensuring consumer and investor protection. According to the agency, there needs to be an interpretation of existing regulations to govern crypto assets that qualify as financial instruments.
The agency has also raised concerns over crypto assets that do not fall under the financial instruments category. Such instruments according to the agency will continue to pose a significant risk as people continue to invest in them. To ensure total protection, the ESM is urging the EU Commission to consider applying securities laws on all crypto assets.
Authorities across the European Union continue to maintain divergent views on cryptocurrencies. Amidst the differences, all of them seem to agree on the need for a better regulatory framework to protect consumers. Ardo Hansson is one such policy maker that is calling for increased consumer protection even though he believes crypto assets are a ‘complete load of nonsense.
Even as authorities in Europe continue to call for common regulations across the block, States in the U.S are taking regulation into their hands. The divergent stance comes on government authorities maintaining different classifications for various digital coins.
Calls for increased regulation follows a tumultuous period that has seen cryptocurrency implode leading to a significant loss of value. The implosion has seen most people lose their hard-earned money on investing in illegal or fraudulent schemes.