Parliament Looks to Tighten Control over Issuance of Crypto-Assets

  • See a translation of the draft here
  • See the output from the GDF MiCA Working Group here

Following the Commission Proposal of the Markets in Crypto-Assets Regulation (MiCA) in September 2020, European Parliament Rapporteur Stefan Berger has tabled his Draft Report amending this Regulation.

The Commission proposal looks to cover all cryptoassets that do not fall within the remit of financial legislation, establishing obligations for issuers and services providers, and delineating different regimes for asset references tokens, e-money tokens, and an ‘other’ category.

Stefan Berger MEP proposes 14 amendments to this proposal centred around delivering greater powers to the ECB and applying existing financial services principles to crypto-assets.

While the original text is in German, GDF has provided a rough translation of the content for ease of access until the official European Parliament translation is available.

See the translation here.

Disclaimer: this is a very rough translation and should only be used as guidance to understand the rapporteur’s intention until the official European Parliament translations are available.

The GDF MiCA Working Group, put together to follow the EU legislative process on this matter and provide the voice of the global industry to the EU, will be considering the Parliament’s Draft Report next week and will provide comments to the ECON Committee.

The Key Takeaways

The amendments propose to:

  • Provide alternative definitions to DLT, E-money tokens and Utility tokens;
  • Create greater alignment with existing EU financial services legislation for example requiring issuers of Asset Referenced Tokens to hold 25% of their fixed overheads as capital requirements in line with the obligation on Investment firms in CRR; and
  • Ensure that Crypto-Asset Service Providers have necessary systems and controls in place to comply with AML/CTF rules.

Lavan Thasarathakumar, Head of Regulatory Affairs — EMEA at GDF and Co-Chair of the GDF MiCA Working Group, says:

‘The amendments are consistent with what is a strong narrative across the EU institutions at the moment of wanting to address the perceived threat of global stablecoins. However, it is important to remember that Crypto-Assets are more than just stablecoins and we do not become blinded by this, losing what is a great opportunity to create the truly all-encompassing regime that provides clarity to this innovative sector.’

‘Whilst the Rapporteur has only tabled 14 amendments at this stage, I have no doubt there will be a number of amendments tabled by the wider ECON Committee and the rapporteur himself before the deadline for amendments. The GDF MiCA Working Group will continue to work with both the European Parliament and the European Council as they go through the legislative process and provide the views of the global community.’

About the GDF MiCA Working Group

The GDF MiCA working group convened in Autumn 2020 to provide detailed feedback to the European Parliament. The group determined some key areas for amendments:

  • Proportionality in creating a level playing field for cryptoassets; and
  • Operational and procedural recommendations to mitigate challenges (including realistic timelines for implementation and 3rd country access).

You can read the full GDF MiCA amendment document here.

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GDF is an industry body promoting the development of best practices and conduct standards for the cryptoasset industry and advocacy with policy makers.

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Global Digital Finance

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GDF is an industry body promoting the development of best practices and conduct standards for the cryptoasset industry and advocacy with policy makers.

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