EU proposes regulation of cryptocurrencies and stablecoins

The European Commission unveiled rules for regulating cryptocurrencies and stablecoins. The 168-page document sets out not only asset requirements but also the creation of a sandbox for blockchain projects.

Euro Commission by ForkLog on Scribd

According to the authors of the draft, in the context of broad dissemination of crypto assets, a ‘reliable legal framework’ with clear requirements is needed. The proposed document is intended to protect consumers and market integrity.

“The Commission aims to stimulate innovation in the EU’s financial sector, especially for high-tech digital startups, while reducing any potential risks,” says in the press release.

Cryptocurrencies and stablecoins will be subject to “stricter requirements” regarding capital controls, investor protection and supervision. The Commission proposes an individual legal regime for such assets.

By 2022 the European Commission plans to launch a regulatory sandbox. In it, companies will be able to test smart contracts and blockchain-based products.

The hardline approach to regulation in the official document mirrors its earlier draft, which circulated online a week ago. Earlier in the draft, the agency proposed to establish a legal framework for cryptocurrency assets analogous to traditional financial instruments.

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