A new report published January 9 by the European Banking Authority (EBA) has recommended further research into cryptocurrency and is calling for a number of actions to be carried out in the cryptocurrency sector throughout 2019.
The report delves into the standardization of regulations pertaining to cryptocurrency businesses operating within the European Union, and the EBA believes this is a much-needed move to eliminate unfair regulatory arbitrage and protect investors.
“Applicability and Suitability of European Union Law to Crypto-Assets”
In the newly-released document, Europe’s banking watchdog (EBA) admits that cryptocurrency and crypto-related businesses do not fall under the European Union law.As stated in the document’s summary:
Typically, crypto-asset activities do not constitute regulated services within the scope of EU banking, payments, and electronic money law, and risks exist for consumers that are not addressed at the EU level.
Now that the EBA has addressed that the crypto sector requires a new standardization of regulation to comply with European law, they have recommended that the European Commission carry out further analysis in order to take action.
The EBA is beginning to tackle the issue of cryptocurrency regulations because different cryptocurrency laws among member states would create undesirable regulatory arbitrage, unfair competition, and a congregation of crypto businesses in countries with less stringent rules.
Overall, the report is focused on the research and analysis of issues relating to crypto-assets and businesses. The EBA is simply calling for a nuanced approach to developing a regulatory framework with rules and standards for the emerging asset class.The EBA report noted: