The European Union has indicated that it will be coming up with a cryptocurrency legal framework that will be used across the region. This comes after realization by the institution that there was no concerted effort among member states to deal with legal issues arising from the fast-growing cryptocurrency industry.
Valdis Dombrovskis, the EU Commission Executive Vice President indicated that the decision came after realizing the lack of legal certainty for developing a sound crypto-asset market in the region. Dombrovskis continued by saying that time had come, where the EU needed to strengthen its international standing in digital finance and become a global standard-setter.
The cryptocurrency legal framework has been in the making for the past year, with the Commission holding multiple consultative meetings with experts across the region for recommendations on how the legal framework should entail. These meetings were able to come up with a ‘non-paper’ resolutions that included priorities that the new legal frameworks would entail.
The cryptocurrency legal framework details
The Commission recommended that all cryptocurrencies should have definitions to make it easier for classifications. This included both the security tokens and the stable coins that are currently traded in the region.
The Commission also recommended that Changes to the Markets In Financial Instruments Directive II (‘MiFID II’ Directive 2014/65/EU) should include crypto assets and also they recommended a regime for blockchain-based platforms.
Implication of the new legislation
Bruno Schneider – Le Saout, chairman of the Brussels-based European Blocktech Federation in a statement said that these legal frameworks, when passed will be historic in the region. He continued by highlighting the importance of these legislations saying that they will be used for many years to come and would usher in a new digital era in the region.
Schneider also commended the legislation by saying that they provided the much needed legal certainty when dealing with cryptocurrency assets that are not by existing EU financial service legislation. He also commended the legislation recognizing crypto assets as financial assets that could be traded within the region.
The passing of the legislation will mark a new milestone in the cryptocurrency world, and give a green light for expanded usage of the assets across the region. The EU is targetting the legislation to pass by the third quarter of 2020. However, this might face challenges as the region continues to battle coronavirus, which might cause delays in the passing of the legislation.