The European Securities and Markets Authority (ESMA) has announced plans for a new legal framework governing the cryptocurrency sector, as part of its focus for the new year.
The authority, which is responsible for overseeing financial regulation within the EU, said it would push for a new framework for regulating the cryptocurrency industries, as one of its foremost priorities for 2020.
The plans were set out in the authority’s 2020-22 Strategic Orientation, which flagged risks posed to European capital markets by digitization. In the report, the authority said it wanted to educate market participants in these risks, as crypto-assets become ever more mainstream.
The dangers of cyberthreats to the financial system as a whole and a sound legal framework for crypto-assets are increasingly becoming areas of focus for ESMA together with the other ESAs, the ESRB, the ECB and the European Commission.
The agency has already implemented frameworks around crypto derivatives and initial coin offerings (ICOs). However, the latest plans would seek to develop a unified “sound legal framework” for operators within the sector, in a bid to reduce these risks—to investors, to businesses and to the stability of capital markets in the region.
The announcement coincides with similar strategies from other governments and regulators worldwide, as regulation of crypto moves further up legislative agendas worldwide. In part, this is being fueled by high levels of cybercrime, in which cryptocurrencies like BTC are often involved.
A legal framework operating throughout Europe would benefit legitimate operators, many of whom are supportive of clear, effective regulation and licensing for cryptocurrency businesses.
The authority will now work to achieve convergence throughout the EU, with the ultimate goal of creating a unified system of crypto regulation across the trading bloc.
Steven Maijoor, chair of ESMA, said authority would focus on creating a level playing field for crypto companies operating across Europe: “ESMA can look back on a successful first nine years that has included the development of the Single Rulebook and establishing itself as a credible supervisor of CRAs and TRs.”
“One of our key priorities is ensuring the consistent and coherent implementation of the Single Rulebook and, with our new powers in this area, we will adopt a risk-based approach, in cooperation with national authorities, to supervisory convergence across the EU,” he said.
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