On 14 November 2023, the European Central Bank published a speech by Andrea Enria (Chair of ECB Supervisory Board) entitled ‘Regulating crypto finance: taking stock and looking ahead’.

In his speech Mr Enria:

• Discusses how recent developments in the crypto assets world have strengthened the case for directly regulating crypto asset activities.
• Touches on some problematic aspects of the Markets in Crypto Assets Regulation (MiCAR).
• Explains how the most advanced forms of decentralised finance seem to pose a fundamental challenge to the very application of financial regulation and supervision.

Among other things Mr Enria notes that as things currently stand, the ECB considers it very difficult to include in the scope of prudential consolidation a subsidiary of a credit institution established as a crypto asset service provider (CASP). This is due to the definition of financial institutions required to be included in the scope of prudential consolidation under the Capital Requirements Regulation. Mr Enria states that including CASPs in the scope of prudential consolidation of banking groups by modifying the definition of financial institution needs to be considered as a matter of urgency.