The top banking regulator in Europe wants the initiation of Pan E.U. rule for Bitcoin exchanges and wallet services in the region. This aimed at giving the members better services across the bloc as stated in a report issued on Wednesday.
Need For Pan E.U. Rule For Crypto Exchanges and Wallet Services
The European Banking Authority, EBA noted in the report issued on Wednesday that Cryptocurrency activities in the E.U. are still relatively limited at the moment and is no threat to financial stability. However, the services such as crypto wallet and crypto trading platforms are not catered for by the existing E.U. level financial services law, even though they may be covered by some national laws which are not consistent across the bloc.
Also, it was noted in the report that the situation gives rise to some potential issues which have to do with the consumer protection, operational resilience, market integrity, and the level playing ground. It was noted by EBA that there would be merit in European commission carrying out a cost-benefit analysis to access whether the EU level action is appropriate and visible at this stage to address the issues prevalent in the crypto market in the bloc.
Introduction Of Proper Reporting Requirement
A plan is underway to introduce Pan E.U. rule for crypto exchanges and wallet services; the EBA is set to address the insufficiency of proper reporting requirements for crypto asset activities at financial institutions in most of the jurisdictions in the EU. The absence of this makes the work of regulators difficult, especially monitoring. This will be addressed by providing a common monitoring template this year to make the job easier for regulators in the bloc.
Also, the EBA will be assessing how cryptocurrencies are being advertised to guide against the dubious activities of malicious actors in the crypto space.
Meanwhile, EBA has made an effort to bring exchanges and wallet services under the purview of the E.U. anti-money laundering laws which is still underway and has seen countries adopt their AML laws accordingly.
Notably, the European Union has seen an increase in crypto adoption and regional regulation of cryptocurrencies in comparison with other regions. Though some notable Asian countries such as Japan and South Korea have made a considerable leap in the crypto space, and for the crypto space to see full adoption, government authorities and regional authorities must provide a suitable environment for crypto growth.