European Commission Floats Legislative Proposals for Comprehensive Crypto Regulations

In a policy statement issued on Sept. 24, the European Commission announced plans to work towards regulatory clarity for Europe’s crypto and blockchain market. According to the communique, the Commission has adopted a set of legislative proposals aimed at digital assets and blockchain firms. The news comes after nearly a year of public consultation to create a European crypto regulatory framework. Back in August, BeInCrypto reported that the European Union was close to releasing “historic” cryptocurrency regulations.

EU Regulators Keen on Crypto and Blockchain Regulations

For security tokens, the Commission proposed the creation of a pilot regime that exempts such offerings from the existing EU financial instruments directive. This regulatory sandbox will allow token issuers to test the necessary protocols for trading and settlement of their cryptocurrency projects. Concerning utility tokens, the Commission recommended the establishment of a new body to govern such offerings. Dubbed the “Markets in Crypto-Assets Regulation,” or MiCA, this new organization will also draft laws to tackle problems like insider trading and front running. MiCA’s proposed oversight powers will also extend to crypto exchanges and wallet providers. Apart from crypto regulations, the European Commission also announced plans for a blockchain regulatory sandbox. The Commission is also collaborating with the European Blockchain Partnership to examine use cases for the novel tech in areas like health, energy, and digital identity. For the Commission, a pan-European crypto and blockchain legal framework is necessary to prevent regulatory arbitrage. Countries like Germany already have more comprehensive crypto regulations than the majority of the region. As previously reported by BeInCrypto, the financial services market is the most popular use case for blockchain in Europe with Ethereum (ETH) being the network infrastructure of choice. However, startups in the region when compared with their counterparts in the United States are underfunded.