The European Union has come one step closer to regulating cryptocurrencies.
The European Commission wants to ensure more legal clarity and security in the crypto industry in its member states
To achieve this, the EU Commission proposed a new package for the digitization of Finance and payment system on 24 September adopted , including the legal, among other proposals for the regulation of crypto currencies.
As the EU Commission states , this is the first time that the highest-ranking executive body of the European Union (EU) dares to regulate crypto currencies.
As part of the new draft legislation, the Commission has particularly focused on so-called stablecoins. As a reminder: Stablecoins are cryptocurrencies that get their eponymous (value) stability through connection to an external asset such as the US dollar or gold.
Specifically, the draft provides that the issuers of stablecoins are subject to stricter requirements in terms of the required share capital, investor protection and supervision
Accordingly, it should be mandatory for stablecoin issuers in the future to have official approval from the respective member state as soon as they have issued more than 5 million euros in stablecoins.
In addition, the EU Commission wants to impose on the issuers of cryptocurrencies that they must present a white paper that discloses certain information. Small and medium-sized crypto companies should be exempted from this obligation, provided that the total value of the crypto currency they offer does not exceed 1 million euros within the first 12 months.
The purpose of the exception is to ensure that „the legal requirements to which crypto service providers are subject are proportional to the risk associated with their services“.
As the executive body further writes, the new measures are intended to help stimulate the European Union’s economy by opening new channels for companies to raise capital. „By making the legal requirements more secure and user-friendly, the Commission wants to promote innovation in the financial sector of the Union, especially through innovative digital startups,“ according to the draft.
The package will now be submitted to the European Parliament and the Council of Europe, which will have to decide whether or not to implement the proposals.