IRELAND UPDATE: European Commission consults on an EU framework for markets in crypto-assets

On 19 December 2019 the European Commission (the “Commission”) issued a consultation document on an EU framework for markets in crypto-assets (the “Consultation”). The Consultation is open until 18 March 2020 and is an important opportunity for stakeholders to contribute to the future regulatory framework in the EU for crypto-assets, including stablecoins.

The task of identifying the extent of existing EU financial services legislation that might apply to crypto-assets was aided in January 2019 by the publication of the European Securities and Markets Authority (“ESMA”) ‘Advice on Initial Coin Offerings and Crypto-Assets’ and the European Banking Authority (“EBA”) ‘report with advice for the European Commission on crypto-assets’.

ESMA and the EBA identified a number of issues – for example: (1) certain crypto-assets are not covered by existing regulation and therefore fall outside consumer and investor protection and market integrity provisions; and (2) where crypto-assets are covered by existing regulation, applying such regulation is not always straightforward. Divergences in the approaches of Member States to the application of existing regulation were also noted.

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