AFME calls for supervisory convergence on the regulation of crypto-assets
The Association for Financial Markets in Europe (AFME) has published a new paper outlining five recommendations for delivering “supervisory convergence on the regulation of crypto-assets” across the region.
In other words, the voice of Europe’s wholesale financial markets is saying it wants to encourage collaboration between regulators and those in Europe willing to tap into the cryptocurrency world by drawing up pointers which “work towards a common approach to the regulation and development of crypto-assets in financial services”.
Recommendations include: (1) establishing a pan-European crypto-asset classification scheme, (2) setting “clear expectations” on issuing crypto-assets, (3) applying “activities-based and technology agnostic regulation”, (4) using existing regulation with amendments “if required”, and (5) prioritising “convergence” of regulatory frameworks with global and regional initiatives.
“There has been a rapid rise in the development of crypto-assets […] however, to realise those benefits, it is increasingly important that crypto-asset regulation is coordinated at the regional and global level to foster innovation, while promoting financial stability and ensuring a level playing field,” says AFME’s MD and head of technology, James Kemp.
“This should start with forming a common understanding of the various crypto-asset terms and activities in financial services”.
The AFME’s paper follows the similarly recent announcement by the German bank association Bankenverband which calls on politicians and central banks for a digital euro.
In Bankenverband’s paper, it also says digital money will need to be classified so as to gain confidence from the public in it. Currently the confusion shrouding whether it is a currency or an asset affects things like its VAT bracket.
The AFME concludes its own paper by saying it believes “Europe has the potential to become a global leader in crypto-assets”, but stresses that fragmentation needs to be reduced and convergence between regulators and country’s cryptocurrency initiatives is needed to achieve this.