The European Commission is preparing a legislative proposal on crypto-assets, less than a year after launching a consultation on the subject, which received more than 200 responses. “It should be for the third quarter of this year, so it’s in very little time,” said Florian Denis, policy officer at the European Commission’s DG Fisma, at a conference organized by the Gide cabinet.
Read more about the new legislative proposal on crypto-assets that the European Commission is working on and be the first to find out the most important financial headlines with the Born2Invest mobile app.
An experimental laboratory for security token issuance projects might be created
The executive could also decide on the creation of an experimental laboratory for security token issuance projects, an idea proposed by the Financial Markets Authority (FMA) in mid-March. After having contributed to the crypto component of the Pacte Act, the FMA has now turned its attention to security tokens. “This is a more complicated subject because they are real financial instruments that are registered on the blockchain and are subject to all financial regulations,” explained Stéphanie Cabossioras, Deputy Director in the AMF’s Legal Affairs Division.
At the moment, the Central Securities Depositories Regulation (CSDR) and certain provisions of the Markets in Financial Instruments Directive (MiFID) are blocking certain projects involving security tokens, notably on settlement and trading platforms. “The idea is to experiment with new projects that cannot be developed, given the current regulations, to create exemptions in European positive law to allow projects to emerge,” explained Stéphanie Cabossioras. For example, “as soon as a financial instrument would be considered illiquid, it would have the right to apply for experimentation,” she continued.
A three-year experiment
Regulators will be able to grant the benefit of the exemption, which does not concern anti-money laundering and market abuse obligations, the FMA pointed out. The Esma (European Securities and Markets Authority) would monitor the various cases in which regulated players, Service Providers on Digital Assets (PSANs) or players with organizational requirements “similar” to those of regulated players would have to apply. The experiment could last three years.
Only the college of commissioners will allow this project to see the light of day. “We want to retain the principle of technological neutrality: when a crypto-asset is a financial instrument, we want to retain the Mif rules and the other rules of the legislation,” said Florian Denis. However, “we are well aware that our regulations may be difficult to apply,” he admitted, acknowledging that the use of security tokens “can bring benefits to the financial markets.”
For Denis, a change in European legislation means drawing on concrete examples, which are rare to date. Hence the usefulness of an experimental laboratory that the European Commission describes as a “pilot scheme”. “This pilot scheme would provide a temporary solution to the difficulties that some people encounter in developing projects linked to security tokens,” emphasized Florian Denis. “If we give the exemption, it must be well supervised,” he warned, pointing out the risks involved in issuing security tokens such as cybersecurity.
On July 16h, the Gide cabinet also published the conclusions of a report on security tokens. 93% of respondents remain very much in favor of setting up a European laboratory.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in L’AGEFI, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Entrepreneurship: the Region Laâyoune-Sakia El Hamra Launches the Program RIYADA
RIYADA, the integrated program of support for project leaders who can benefit from PIAFE funding comes to promote the entrepreneurial...
Finlombarda Invests 1.5 Million in a Fund Promoted by P2P Lending October to Finance SMEs in Lombardy
In May 2020, the fintech company October launched a new direct lending fund dedicated exclusively to investments in loans to...
DeFi Projects Raised $200 Million in 2020 and $1 Billion since 2017
Geographically, between 2018 and Q1 2021, the largest funding to DeFi came from North America and Apac (80% of the...
Dirham Project: the World’s First Regulated Stable Currency
The team behind the project has implemented the dirham as a stable currency, the terms of the DAH protocol are...
Five Impact Investment Projects around the World
Impact investing gives investors the opportunity not only to earn a return on their money but also to have a...
Crypto6 days ago
Stablecoins: The New Kid On The Crypto Block
Cannabis6 days ago
Bill Authorizing Medical Cannabis Cultivation Advances in Brazilian Congress
Crypto7 days ago
Bitcoin Mining Banned, Search Engines Ban Exchanges: China Cracks Down
Biotech6 days ago
Investing in Respiratory Therapies: Saving 30 Million Euros per Year