By Hassan Mehmood (Saudi Arabia)
The proposal for cryptocurrency regulation is coming for Europe, which may result in growth of digital assets. The crypto-related business and stablecoin usage will flourish after the implementation of the proposal about cryptocurrency.
According to IFC Review’s report, the legislative department of the EU, the European Commission, is working over the cryptocurrency legislative framework. The proposal will advocate support for digital assets as well as the digital finance network.
Recognition of Crypto-assets
Last year, the European Commission worked to recognize cryptocurrency after doing consultations with experts in the field. The legislative body of the European Union recognized stablecoins and cryptocurrency including Bitcoin as financial instruments. The introduction of the regulatory framework for blockchain-based companies was also included in the priorities.
The law about digital currencies will result in adoption at a large scale and will provide support to build crypto-based businesses in the region thus result in the growth of the European economy.
Bruno Schneider – Le Saout, chairman of the Brussels-based European Blocktech Federation, considers this legislation a historic deal for European countries. “We expect this legislation to be historic for Europe, he said. “These laws will support digital finance across the EU for many years to come.”
“There is the qualification of crypto-assets as ‘financial instruments’ which is crucial as it places crypto-assets within the extensive set of European and national legal instruments that regulate the EU financial market – most notably Mifid II,” he added further.
Lack of Legal Certainty
As there is certainty about the regulation of digital assets, it is difficult for crypto-based tech firms to perform their full extent. The vice president of the Commission, Valdis Dombrovskis, said in June this year:
“Lack of legal certainty is often cited as the main barrier to developing a sound crypto-asset market in the EU. 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.”
But Schneider-Le Saout believes that the new legislation will offer legal certainty. “The new legislation will provide legal certainty, which is needed both for crypto-assets that are not covered by existing EU financial services legislation and for the application of DLT in financial services and the tokenisation of traditional financial instruments,” he added.
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