French Financial Watchdog Largely Agrees With EU’s Crypto Proposal But Remains Cautious
Major stock markets regulators in France the Financial Markets Authority (AMF) have issued its official stance on crypto-assets as well as regulations in regards to the recently released European Commission’s consultation. Although the regulator agrees that an ambitious approach will help in spurring innovation, the report pinpoints that global stablecoins pose a major threat to the global financial system.
The EU Commision has been formulating a single policy on the use of virtual finance in the European Union which also deals with the various risks that come with digital money. To further this idea, the Commission came up with a public consultation platform which started Dec 19, 2019 and ended on March 19, 2020. The aim of the consultation process was to come up with an acceptable legal framework to guide the crypto asset markets.
According to Cointelegraph, the response from the AMF mostly agrees with most of the proposals by the consulting team and advocates for a friendly environment to enhance the thriving of blockchain projects within the EU. However, AMF urges caution when it comes to stablecoins.
The response by the AMF wages on the definition of crypto-assets with the regulator stating that crypto assets should be classified using the current categories so as to differentiate the crypto assets which can be said to be financial instruments and the ones which are not.
The report also indicates that most of the digital financial assets are in their infancy and as such it is not yet time to come up with a definite classification of the various crypto assets in the market. The report states that a crypto asset is any “digital asset that may depend on cryptography and exists on a distributed ledger.”
The response suggests that the EU should adopt specific provisions to deal with the stablecoins. The regulator states that stablecoins can lead to systemic risks within the EU block.
However, going by the French government’s reaction to the Libra project, the call for caution when it comes to global stablecoins is unsurprising.