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EU Introduces New Regulations for Crypto Providers

Yigit Taha OZTURK — Fri, 15 Nov 2024 14:00:19 +0000

The EU is taking significant steps to enhance security and transparency in the crypto sector with new regulations aimed at crypto-asset providers. The European Banking Authority (EBA) has published two sets of guidelines targeting payment service providers (PSPs) and crypto-asset service providers (CASPs), aiming to ensure compliance with EU and national restrictive measures and sanctions.

These guidelines will help financial institutions, including PSPs and CASPs, minimize legal and operational risks associated with their activities, particularly in relation to crypto transfers. The EBA emphasizes that weaknesses in internal controls could result in reputational damage and undermine the effectiveness of EU sanctions, potentially allowing circumvention of rules and destabilizing the financial ecosystem.

The EBA stresses that by December 2025, PSPs and CASPs must implement reliable screening systems to comply with EU restrictive measures. This includes managing the risk of entities violating these measures and preventing circumvention of sanctions. These regulatory steps are crucial in strengthening the EU financial security and the integrity of the crypto industry.

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The regulations stem from a 2021 European Commission proposal to reform the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) frameworks, with these rules set to take full effect in December 2024.

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EU Releases Draft Rules for Multi-Currency Stablecoins under MiCA

admin — Wed, 13 Mar 2024 16:30:38 +0000

EU regulators have taken another step forward in the regulation of stablecoins under the Markets in Crypto Assets (MiCA) framework, with the publication of a batch of draft rules by the European Banking Authority (EBA). These draft Regulatory Technical Standards (RTS) outline requirements for stablecoin issuers when handling complaints related to stablecoins referencing multiple currencies or assets.

The latest publication from the EBA marks the culmination of collaborative efforts between the EBA and the European Securities and Markets Authority (ESMA) to develop regulations under MiCA. This release is part of a series of batches of draft rules that the regulators intend to issue in the context of MiCA.

The RTS recently published by the EBA specifies the requirements, templates, and procedures for managing complaints received by issuers of asset reference tokens (ARTs) as defined by MiCA. Unlike traditional stablecoins, which are typically pegged to the value of a single currency like the euro or U.S. dollar, ARTs, such as Libra (now Diem) proposed by Meta, have the ability to reference multiple currencies or assets, including cryptocurrencies.

While MiCA as a whole is slated to come into effect in December, the rules specifically targeting stablecoins are expected to be enforced this summer. The publication of these draft standards follows a consultation period conducted by the regulators between July and October of last year.

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