While Europe is one step closer to getting a concrete legal framework for digital finance, we can see how the European Commission embraces a new digital finance package for crypto and blockchain.
A legal framework for digital finance is apparently in the works, and the European Commission is moving to provide more legal clarity and certainty for the crypto industry in its member states, the cryptocurrency news show.
A document showed that on September 24, the EC officially adopted the new digital finance package which includes digital finance and retail payments strategies, as well as legislative proposals on crypto assets. Then, EC said that the new package represents the first time that the authority proposed new legislation on crypto assets.
As part of the new legislative proposals, the European Commission embraces and pays special attention to stablecoins, which are a type of cryptocurrency that pegs its value to an external reference such as the United States dollar, or an algorithm.
In this manner, the proposals aim to introduce more stringent requirements for stablecoin issuers when it comes to capital, investor rights, and supervision, as the text of the proposal reads.
So, the EC aims to require stablecoin issuers to complete authorization by a national competent authority, if the outstanding amount of stablecoins is above 5 million EUR ($5.8 million). The authority also wants to oblige crypto asset issuers to publish a white paper with mandatory disclosure requirements. Here, small to medium-sized enterprises will be exempted from the publication where the total consideration of the offering of cryptocurrencies is less than 1 million EUR ($1.1 million) over a period of 12 months.
This exclusion makes sure that “the requirements imposed on crypto-asset service providers are proportionate to the risks created by the services provided.” As the authority said, the new measures will be crucial in the way they support the economic recovery of the European Union, as it would unlock new ways of channeling funding to Europe’s businesses.
“By making rules safer and more digital friendly for consumers, the Commission aims to boost responsible innovation in the EU’s financial sector, especially for highly innovative digital start-ups,” the EC noted.
The package is now subject to consideration by the legislative counterparts of the EC, the European Parliament and the European Council.
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