Crypto Assets – Challenges and opportunities

Press release

EESC calls for strong, streamlined regulation of crypto-assets

Key points

The EESC

• takes a balanced but measured view in relation to crypto-assets and notes some of the opportunities that could arise in the future, particularly due to technological developments;
• strongly supports the European Commission's proposal for a Regulation on Markets in Crypto-assets (MiCA) which is aimed at regulating crypto-assets within the EU;
• also calls for a robust regulatory and operational framework to improve the financial tracking of transactions and tax compliance of crypto-assets;
• strongly recommends that authorities should abide by the "same activity, same risks, same rules" principle. This requires building on existing regulatory frameworks in the case of businesses transacting in crypto-assets where similar risks as those arising in traditional ones need to be covered;
• believes this is necessary to avoid asymmetries between analogous services and assets that could fall under different frameworks due to technicalities;
• requests that a regulatory framework for crypto-assets needs to be consistent across jurisdictions and not just within the EU;
• supports innovation within the EU and considers it important that ordinary products based on blockchain technology that are not financial in nature are treated as their physical counterparts and not as financial instruments, following the "same activity, same risk, same rules" principle;
• notes with concern the environmental consequences of crypto-assets and related mining activities given the EU's climate commitments as part of the Green Deal and is of the view that despite emerging DLTs such as blockchain that seem to be able to deliver sustainable infrastructure for a low carbon future, there is no conclusive proof that this is the case;
• is of the view that blockchain, as the main underlying technology for crypto-assets, could help address the risks that currently prevail in the market. The potential benefits of blockchain range from real-time transactions allowing risk reduction and better capital management to improved regulatory effectiveness;
• also notes that technological developments can help address existing tax compliance limitations, thus improving transparency and the quality of data sent to the tax authorities for control purposes, addressing tax fraud and illicit transactions;
• fully supports the role played by the ECB in monitoring developments in crypto-assets and their potential implications for monetary policy and the risks crypto-assets may pose to the smooth functioning of market infrastructures and payments, as well as for the stability of the financial system.