European Banking Authority (EBA) Ponders New Crypto Rules for Consumer Protection
The European Banking Authority, also known as EBA, released a report with a new set of rules to improve the regulatory landscape for virtual currencies and blockchain technology in the European Union (EU).
The EBA urged the European Commission to examine and analyze new the impact of new unified crypto rules for the continent. At the moment, there are different regulations depending on the country and nation.
Malta seems to be the most open country for virtual currencies and blockchain technology in the European Union. Other countries such as Poland seem to have taken harder stances towards Bitcoin and other digital assets. The report reads as follows:
“Typically, crypto-asset activities do not constitute regulated services within the scope of EU banking, payments, and electronic money law, and risks exist for consumers that are not addressed at the EU level.”
The EBA recommends to the European Commission to carry out more analysis and determine which is the correct response that the EU should give to the regulatory framework.
As cryptocurrencies expanded all over the world during the last few years, new activities emerged that are currently not regulated. This creates problems for companies, investors and users, that are not protected by the current laws. For example, Initial Coin Offerings (ICOs) released tokens to the market, but some of them were simply fraud or just scams, affecting investors.
According to Adam Farkas, the EBA’s executive director, EBA’s warnings to consumers and institutions on digital assets remain valid. The intention is to achieve a common EU approach to digital assets. The EBA will also be monitoring market developments from a prudential and consumer perspective.
The European Banking Authority explained that it will be taking different measures to monitor the crypto space and develop new monitoring activities. They will also be assessing business practices and determine the treatment that institutions give to cryptocurrencies.
At the same time, the European Securities and Markets Authority (ESMA) has recently released a report related to cryptocurrencies and Initial Coin Offerings. It advises several EU institutions on existing rules that could be applied to digital assets and set out new rules to solve those situations in which current rules cannot be applied.
The European Union should take a more active approach towards digital assets. In many other countries, regulatory agencies are getting involved in the market trying to offer investors clear rules were to participate.