Work continues in the European Parliament on the digital finance package. The draft report by Stefan Berger (EPP, Germany) on the proposed regulation on Markets in Crypto-Assets (MiCA) will be discussed for the first time in the Committee on Economic and Monetary Affairs (ECON) on 14 April.
Presented in September 2020, the proposal aims to establish uniform rules for EU-level providers and issuers of crypto-assets not covered by existing EU financial services legislation, including for “global stablecoins” (see EUROPE 12567/2).
In his draft report, Mr Berger proposes 14 amendments, which are mainly aimed at giving more powers to the European Central Bank (ECB) as well as applying existing principles for financial services to crypto-assets.
According to the rapporteur, the decision on the authorisation of e-money tokens should indeed be left to the ECB, as these tokens can reach market volumes that may have an impact on the monetary security of the euro area.
The ECB should thus be able to refuse authorisation, if it is unable to exclude the existence of a threat to financial stability or monetary sovereignty within the euro area. In its proposal, the European Commission only foresaw the possibility for the ECB to issue a non-binding opinion.
According to the rapporteur, the capital requirements for issuers of asset-referenced tokens should also be comparable to those for other market participants in order to ensure a level playing field.
It thus proposes that the capital requirement provisions applicable to investment firms subject to the Capital Requirements Regulation (CRR) be extended to these issuers, i.e., to have at all times capital of at least one quarter of the previous year’s fixed overheads.
The rapporteur also considers that the way in which Distributed Ledger Technology (DLT)—the technology behind crypto-assets—is defined in the text does not coincide with the way DLT is generally understood.
The definition in the MiCA regulation does not include, for example, existing DLT-based crypto-assets, such as Ethereum, since these crypto-assets are not encrypted, he explains. In his view, an alternative definition should be proposed and, specifically, the reference to encryption should be dropped.
Combating money laundering
Combating money laundering and terrorist financing in the crypto-asset space must be a priority, according to Mr Berger.
He considers that crypto-asset service providers that are obliged entities under the Anti-Money Laundering Directive should have effective procedures in place to prevent and detect money laundering and terrorist financing.
On 14 April, the ECON Commission will also discuss the draft ‘Kelleher’ and ‘Peksa’ reports on the Digital Operational Resilience Act (see EUROPE 12686/29), as well as the draft ‘Van Overtveldt’ report on a pilot scheme for market infrastructures based on distributed ledger technology (see EUROPE 12677/12).
See the draft ‘Berger’ report: https://bit.ly/2PGEvIs (Original version in French by Marion Fontana)