The largest financial regulator in France has suggested changing the way the cryptocurrency industry is supervised in Europe.
Robert Uville, president of Autorité des Marchés Financiers, spoke about regulatory issues related to cryptography at the 5th Annual Conference on FinTech and Regulation. The official argued that financial supervisors must take a new approach to organizing blockchain-based financial instruments due to the explosive growth in the market.
Ofill suggested that the European Securities and Markets Authority, or ESMA, be the authority responsible for this new area of regulation and oversight. Ofill assured that the current stage of regulation in the European Union will facilitate the development of the Emirates Authority for Standardization and Metrology (ESMA) guidelines and policies:
“Since this regulation is completely new, it is easier to provide ESMA with competence from the start than if this were considered at a later stage. Moreover, it would make sense to collect all the expertise within the same authority, since the cost of entering the crypto world is very high. “.
Located in Paris, ESMA is an independent body of the European Union focused on safeguarding the stability of the Union’s financial system by strengthening investor protection and promoting stable financial markets. In early 2018, the Emirates Authority for Standardization and Metrology issued a joint warning that cryptocurrencies were a high-risk asset, warning investors against “investing money they cannot afford to lose.”
Ophèle also proposed more enabling regulations, including a regulatory sandbox for the security token industry. The official said the current rules are hampering the development of blockchain technology because they are designed for centralized systems. Ophèle said that the decentralized nature of the blockchain could play an important role in the European economy:
“DLT technology reduces risk, by accelerating the market chain and its distributed nature that can mitigate some of the cyber risks raised by central market infrastructures, such as the single point of failure. […] It is also a matter of maintaining competition in Europe at a time when similar approaches are now being applied in many countries. “
The European Commission published its regulations for the Crypto-Assets or MiCA markets in September 2020, providing a legislative system for the crypto markets and related service providers. Major crypto companies including ConsenSys later expressed concerns about MiCA, warning that the new regulations could burden the industry with costly and complex compliance and legal requirements.