AFME calls for teamwork on crypto-asset regulation

The Association for Financial Markets in Europe (AFME) has called for collaboration on the regulation of crypto-assets in Europe.

Highlighted in a new paper, the body recommends regulators across Europe should work with commonality to the regulation of these asset types.

The regulator has listed all of the regulatory approaches and taxonomies across the region and indicates where differences lie.

While there are similarities in how crypto-assets are classified, it notes how different regulatory methods are, which it believes is creating uncertainty for market participants.

To improve the environment, the AFMR has made five recommendations. These include establishing a pan-European crypto-asset taxonomy, providing clear expectations for market participants for issuing crypto-assets and applying activities-based and technology agnostic regulation.

The body also believes existing regulations for regulated assets should be applied and priority should be placed on collaboration between regulators around the world.

AFME managing director, head of technology and operations James Kemp said, “There has been a rapid rise in the development of crypto-assets, which could offer significant benefits for wholesale markets.

“However, to realise those benefits, it is increasingly important that crypto-asset regulation is coordinated at the regional and global level to foster innovation, while promoting financial stability and ensuring a level playing field. This should start with forming a common understanding of the various crypto-asset terms and activities in financial services.”

It has been tough to reach a consensus on cryptocurrency regulation. Earlier in the year, ESMA gave its own advice to the European Union Institutions on how to regulate initial coin offerings, including how to qualify crypto-assets under MiFID II.

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