On 28 August 2019, the European Commission (the Commission) published an answer given by Valdis Dombrovskis (Vice-President European Commission, Financial Stability, Financial Services and Capital Markets Union) concerning cryptoassets. In its response, the Commission refers to an announcement made in its 2018 Action Plan on FinTech (see previous blog post here) that it is looking closely at the opportunities and challenges raised by cryptoassets, including digital currencies.
The Commission explains that, based on advice received from the European Securities Markets Authority (ESMA) and the European Banking Authority (EBA) in January 2019, it is currently engaged in two work streams:
- to ensure EU legislation does not inadvertently hinder innovation of cryptoassets that are covered by EU rules and therefore qualify as financial instruments; and
- to assess internally the merits of a possible common regulatory approach at EU level, notably to ensure the protects of consumers, for cryptoassets that are currently not covered by EU legislation.
The Commission expects both assessments to be ready by April 2020 under the supervision of the new Commission.
In regards to Facebook’s proposal of a “stable-coin”, Libra, the Commission notes that it is monitoring the developments of this project from a regulatory perspective and assessing its risks, in particular with regard to financial stability, monetary policy, data privacy, money laundering, consumer protection, competition and cyber security. It is also carrying out a preliminary assessment in cooperation with ESMA and EBA, of the legal nature of Libra and the authorisations it may have to seek under EU law.
On a final point, the Commission states that is it working with international partners with the aim of ensuring a coordinated approach globally to manage any risks posed by Libra.