The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published its final report on virtual currencies.
In February 2016, ECON published a draft version of the report, which set out an analysis on the threats and opportunities posed by virtual currencies (VCs) and distributed ledger technology (DLT) and proposed recommendations to the EU authorities on the regulatory approach that should be taken. Our blog entry on ECON’s draft report can be found here.
Although the final report has been expanded to include further observations concerning the threats and opportunities posed by VCs and DLT, no substantive changes appear to have been made to the recommendations set out in the draft report.
The final report makes a number of points including:
- that a proportionate regulatory approach should be taken at the EU level so as not to stifle innovation or add superfluous costs to it at this early stage, while taking seriously the regulatory challenges that the widespread use of VCs and DLT might pose;
- that key EU legislation, such as the Regulation on over-the-counter derivatives, central counterparties and trade repositories (EMIR), the Central Securities Depository Regulation, the Alternative Investment Fund Managers Directive and MiFID II / MiFIR, could provide a regulatory framework in line with the activities carried out, irrespective of the underlying technology, even as VCs and DLT-based applications expand into new markets and extend their activities but observes, however, that more tailor-made legislation might be needed;
- welcoming the European Commission’s suggestions for including VC exchange platforms in anti-money laundering legislation in order to end the anonymity associated with such platforms; and
- recommending that the Commission draw up a comprehensive analysis of VCs and, on the basis of that assessment, consider, if appropriate, revising the relevant EU legislation on payments, including the Payments Accounts Directive, the Payment Services Directive and the Electronic Money Directive, in light of the new possibilities afforded by new technological developments including VCs and DLT, with a view to further enhancing competition and lowering transaction costs, including by means of enhanced interoperability and possibly also via the promotion of a universal and non-proprietary electronic wallet.
View ECON report on virtual currencies, 11 May 2016