Featured Product

    EBA Report Assesses Applicability of EU Law to Crypto Assets

    January 09, 2019

    EBA published the results of its assessment of the applicability and suitability of EU law to crypto-assets. The report examines the application of current EU banking, payments, e-money, and anti-money laundering laws to crypto-assets and analyzes the crypto-asset custodian wallet providers and crypto-asset trading platforms, building on the July 2014 EBA opinion on virtual currencies. The report also examines the activities of credit institutions, investment firms, payment institutions, and electronic money institutions regarding crypto-assets, along with the associated regulatory and supervisory issues.

    The assessment reveals that relatively low level of crypto-asset activity currently observed in the EU does not appear to give rise to implications for financial stability. However, typically, activities involving crypto-assets fall outside the scope of EU banking, payments, and electronic money regulation, though certain risks exist for consumers, which are not addressed at the EU level. As a result of the development of national regulatory responses, divergences between the member states are starting to emerge, presenting risks to the level playing field. Market developments also point to the need for a further review of EU anti-money laundering legislation.

    Therefore, EBA sets out, in the report, advice to EC about the need for a comprehensive cost/benefit analysis, taking account of issues inside and outside the financial sector, to determine what, if any, action is required at the EU level at this stage. EBA also advises EC to take account of the October 2018 recommendations of the Financial Action Task Force (and any further standards or guidance) regarding, in their terminology, "virtual asset" activities and to take steps, where possible, to promote consistency in the accounting treatment of crypto-assets. Additionally, EBA sets out a number of steps that it will take in 2019 to enhance the monitoring of institutions' crypto-asset activities and consumer-facing disclosure practices. These steps include the following:

    • The development of a common monitoring template, which competent authorities can issue to institutions, payment institutions, and electronic money institutions (and, as appropriate, other financial institutions) to monitor the level and type of crypto-asset activity underway
    • The assessment of business practices of institutions, payment institutions, and electronic money institutions regarding crypto-asset advertising, pre-contractual information about risks related to crypto-asset transactions for consumers (lack of legal framework, liquidity risk, and so on), and the disclosure of the rights and safeguards applicable to consumers in the context of any crypto-asset services provided by those institutions to assess what actions are needed to ensure high standards of consumer protection
    • Report to EC on the conclusion of the BCBS work on the prudential treatment of banks’ holdings of/exposures to crypto-assets
    • Keep under review the need for any guidance to support a common application of the prudential rules under the Capital Requirements Directive and Regulation (CRD/CRR) regarding institutions’ exposures to/holdings of crypto-assets
    • Perform continuous monitoring of innovation and of the regulatory perimeter, including with regard to crypto-asset activities (ongoing)

     

    Related Links

    Keywords: Europe, EU, Banking, PMI, Securities, Regtech, Fintech, Crypto-assets, AML, EBA

    Related Articles
    News

    BIS Quarterly Review Discusses Developments in Fintech and ESG Space

    BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.

    September 20, 2021 WebPage Regulatory News
    News

    BCBS to Consult on Supervisory Practices for Climate Risks by Year-End

    The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards

    September 20, 2021 WebPage Regulatory News
    News

    OCC Identifies Operational Risk Deficiencies in MUFG Union Bank

    The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.

    September 20, 2021 WebPage Regulatory News
    News

    EC Rule on Contractual Recognition of Write Down and Conversion Powers

    The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.

    September 17, 2021 WebPage Regulatory News
    News

    ECB to Consider Climate Risks When Reviewing Collateral Framework

    In a response to the questions posed by a member of the European Parliament, the President Christine Lagarde highlighted the commitment of the European Central Bank (ECB) to an ambitious climate-related action plan along with a roadmap, which was published in July 2021.

    September 17, 2021 WebPage Regulatory News
    News

    SRB Provides Update on Approach to Prior Permissions Regime

    The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.

    September 16, 2021 WebPage Regulatory News
    News

    APRA Issues Further Guidance on Application of Securitization Standard

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.

    September 16, 2021 WebPage Regulatory News
    News

    ACPR Publishes Corrective Version of RUBA Taxonomy

    The French Prudential Control and Resolution Authority (ACPR) published the corrective version of the RUBA taxonomy Version 1.0.1, which will come into force from the decree of January 31, 2022.

    September 15, 2021 WebPage Regulatory News
    News

    Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics

    The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.

    September 15, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.

    September 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7487