Work on the development of a legislative proposal on a future EU framework for markets in crypto-assets is gathering pace. On 18 May 2020, the European Commission hosted a meeting of an Expert Group on Banking, Payments and Insurance (EGBPI), composed of Member States experts, during which it presented its ideas for future legislation in the area. The Commission’s focus is on three types of crypto-assets: (1) crypto-assets which fall within scope of existing EU financial services legislation; (2) crypto-assets outside the scope of existing EU financial services legislation; and (3) “stablecoins”.
One of the main objectives of the future framework will be to provide clarity on the application of EU financial services legislation to such assets, at the same time creating a framework for customer and investor protection, market integrity as well as risks stemming from a broader use of crypto-assets and DLT-based solutions in financial markets. To this end, the Commission developed a number of options for each of the three types of crypto-assets it considers for the purpose of the future regime. For crypto-assets which fall within scope of existing EU financial services legislation, the Commission considers options ranging from non-legislative measures (guidelines), targeted legislative changes to existing legislation and the introduction of a pilot regime for a certain period of time and allowing for the creation of a new DLT market infrastructure for the trading and/or settlement of security tokens. Regarding options for crypto-assets that currently fall outside the regulatory perimeter, the Commission considers the development of a dedicated piece of legislation for crypto-assets not covered by EU financial regulation, based on two options: an EU opt-in regime and a fully harmonised regime for crypto-asset issuers and service providers. Finally, in respect of options for “stablecoins”, the Commission considers three options including: the development of bespoke legislative measures on “stablecoin” issuers, regulating “stablecoins” by bringing them within the scope of existing legislation and measures aimed at limiting issuances of and services related to such instruments in the EU.
This consultation with Member State experts builds upon the feedback received by the Commission to its broad public consultation, which concluded in March 2020 and gathered nearly 200 responses from a wide variety of stakeholders. Over the coming weeks the Commission will undertake further evaluation of the proposed options by taking into account feedback provided by Member States experts. A legislative proposal is expected to be published in Q3 2020.