EU financial clearing houses EU want digital currency standardization

The European Union (EU) has been moving toward better provisions and guidance for the digital asset industry. How digital currency transactions are managed, and money-laundering concerns mitigated, have been at the forefront of regulatory discussions, and go a long way toward establishing a solid baseline for operations in the space. However, they don’t go far enough, and a group representing financial clearing houses across the continent is calling upon EU regulators to do more.

The EU recently sought input for its “On an EU framework for markets in crypto-assets” report, which would create standard regulatory guidelines for many aspects of digital asset activity. The European Association of CCP Clearing Houses (EACH) responded, showing solidarity among its members in agreeing that a singular regulatory framework is needed. But, EACH also pointed out that the report has certain limitations that, if addressed, would vastly improve how digital assets are perceived in the global market.

EACH is an entity that includes financial clearing houses such as LSE, ICE and CME Group, among others. In issuing its response to the EU request, the group explains, “[There’s a need] for a single EU classification of digital assets – A clear and distinct categorization of digital-assets between security, payment, utility and hybrid-asset is deemed by EACH of critical importance to determine if a given digital-asset falls under an existing EU regulative framework and to align the existing regulation.”

EACH points out that, per the recently adopted anti-money-laundering directive in the EU, AMLD5, digital currency wallet providers are now required to adhere to the same guidelines as other financial entities. As a result, and per the EU’s overall financial activity framework, the providers have to be regulated.

The group also appears to realize that stopping blockchain and digital asset development is not a possibility, and that the two will eventually become part of the mainstream economic space. However, EACH isn’t concerned that its viability will be threatened, at least not in the short term, and asserts, “Certain functions of the CCP, including multilateral netting as well as the performance of risk, collateral, and default management processes, will indeed remain unique features of central clearing even if the industry moves to a distributed ledger.”

As many in the Bitcoin space have previously stated, creating regulations for the industry is not only a requirement, but a necessity for the industry to mature. EACH recognized this, as well, concluding, “Necessity of a gradual regulatory approach – EACH believes that a gradual regulatory approach in the areas of trading, post-trading and asset management concerning security tokens would be not only appropriate but also necessary not to stifle innovation and to carefully monitor DLT as well as security tokens developments at this time.”

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

[10]
[10]