French regulator suggests ESMA should regulate digital currencies in EU

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The government of France has suggested that the European Securities and Markets Authority (ESMA) should be given the power to regulate digital currency in the European Union, in a move that would establish the body as the ultimate authority over the sector across the trading bloc.

The French securities regulator, the Autorité des marchés financiers (AMF) suggested that “[d]irect supervision should also be granted to ESMA whenever the EU decides to regulate a financial activity, profession or type of product that was previously unregulated,” as part of a recently published policy paper.

The paper went on to say that it makes sense for regulation to happen at the ESMA level, ensuring a Europe-wide framework for regulating the digital currency markets.

“In such cases, it makes sense to build regulatory expertise at ESMA level from the outset. For instance, should an EU framework be established to regulate providers of non-financial data, ratings and services in the future, it would be legitimate to entrust ESMA with authorisation and supervision tasks in relation to the entities covered by that framework. Likewise, granting ESMA the power of direct supervision of public offers of crypto-assets in the EU (scrutiny of white papers) and of crypto-asset service providers would create obvious economies of scale for all national supervisors and concentrate expertise in an efficient way, for the common European benefit.”

The suggestion aligns with ESMA’s previous pronouncements and policy ideas for the digital currency space, which has seen it among the leading voices in the European Union in helping to shape the overall policy response.

If adopted, the French proposals would look to capitalize on the experience and expertise already built up in ESMA towards regulating the digital currency sector, while providing legal certainty for digital currency businesses looking to operate in the region.

It comes following proposals for an EU wide regulatory framework for digital currencies, which were launched formally last Autumn.

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