European Commission passes first ever legislation concerning crypto assets
As more and more people adopt crypto assets, the EC is working on some legal perimeters for its member states
In 2018, the second Global cryptoasset Benchmarking Study estimated the number of identity-verified crypto users at about 35 million users. One of the most recent studies at the Cambridge Centre for Alternative Finance recently revealed that there are now more than 100 million people who currently own Bitcoin or several other blockchain-based assets around the world, totaling to a 189% increase in users. The study also showed that this surge was very much due to the activity in the Asica-Pacific, the Americas, North America and Europe.
As a result of this, the European Commission is attempting to create certain clear legal parameters for the cryptocurrency industry in its member states, and on the 24th of September it officially adopted new digital finance package, the first to address crypto assets, that handles digital finance, new payment strategies and naturally, legislative proposals on crypto assets.
The proposals are intended to target stablecoin issuers, and was essentially is made of a selection of particular requirements to create some sense of supervision, requiring for instance, a stablecoin issuer to finish authorization by a national competent authority if they go over €5 million, and oblige issuers to publish a white paper with specific disclosures. The Commission stated that
“By making rules safer and more digital friendly for consumers, the Commission aims to boost responsible innovation in the EU’s financial sector, especially for highly innovative digital start-ups, while mitigating any potential risks related to investor protection, money laundering and cyber-crime.”
The underlying crux of this package is considering the potential adoptions of more crypto-based financial methods in the future, and so the commission saw the need to support the EU’s economic recovery by facilitating new processes of funding Europe’s business.