The Committee of the European Parliament Advised for Crypto Rules as per International standards


The Committee by the European Parliament
has published a study finding the ambiguities in the crypto regulations at the
international level. The report includes the developments of crypto assets,
regulatory concerns, and responses at the international level. The report had
been prepared at the request of Committee on the Economic and Monetary Affairs
(ECON) which oversights the European Central banks and their financial
infrastructure.
The Report emphasizes the necessity for
bringing the stable coins, fundraising through tokens, and the money laundering
through crypto mining under regulations.
The report states that to avoid the regulatory
arbitrage, rulemaking on crypto-assets should place at the European level,
preferably in the execution of international standards.
The report also emphasizes the continuation
of the cooperation of the Financial Action Task Force (FATF) and the European
Union. It also advises the EU to align with FATFS’s international standards.
Crypto Mining Identified as Money
Laundering Threat
The report reveals that crypto mining can
be used as a vehicle for crimes by criminal organizations.
The report states that the newly mined
coins by definition of law are considered ‘clean’. So if any bank or any other
entity is willing to convert them into fiat currency or other crypto assets,
the converted amount will be considered as clean as well. So the first
regulatory step could be to seek the technique and should be utilized
subsequently. It proves to be an important blind spot, it can be considered as
a countermeasure.
Stable coins – a new challenge for
regulators?
The report discloses that most stable coins
in circulation, are explained as having a ‘local footprint.’ However, the
parliament notes that the rise of global stablecoins like Libra from Facebook
could poses challenges to the regulators.
The parliament is actually concerned with
the observations of economist John Vaz which sees Libra as a big threat.
The function of the Committee of
Economic and Monetary Affairs (ECON)
The Committee of Economic and Monetary
Affairs (ECON) is a Committee under the European Parliament which looks after
the regulations of financial services. Oversights European Central bank and
international financial systems.

Jayashree Ingle
CBW - External Analyst
INDIA