EU develops more rules for cryptocurrency projects

The EU is preparing to update its cryptocurrency rules that could make it more difficult for stablecoin projects, such as Facebook’s proposed Libra.

EU economic minister Valdis Dombrovskis said that Europe should take the opportunity to take a leading role in regulating of digital finance field.

“This is a good chance for Europe to strengthen its international standing and to become a global standard-setter, with European companies leading new technologies for digital finance.”

Dombrovskis said that first of all the EU will focus on cryptocurrencies. Although some crypto assets, e.g. token shares, are quite well protected by European legislation, many of them, especially stablecoins, remain completely unregulated.

“Lack of legal certainty is often cited as the main barrier to developing a sound crypto-asset market in the EU.”

Some EU members have taken over regulation, which is detrimental to market integration and makes it difficult for companies to operate. According to Dombrovskis, the new regulatory regime for cryptocurrency will not only cover unregulated digital assets, but also consolidate and unify existing standards in EU member states.

Dombrovskis did not disclose details of the regulatory regime being developed, but stressed that it will support and encourage innovations. According to him, the pilot scheme will allow regulators to provide opportunities for the development of new experimental solutions, whose work will be monitored.

He also noted that the EU is particularly interested in introducing stricter rules for any project that is considered a “global stablecoin”. According to Dombrovskis, global stablecoins, such as Libra, can “cause additional problems”, that is, disrupt financial and monetary stability.

“Overall, our approach will be proportionate and relate to the level of risk. That means lighter rules for less risky projects.”

At the end of last year, the EU opposed the launch of stablecoins before the development of regulation, and earlier the Association of European Financial Markets (AFME) called on the EU to develop a common regulation for cryptocurrency industry.

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