Independent media outlet EURACTIV is reporting that a new crypto watchdog in Europe is in the making as European authorities finalize a 167-page draft by the European Commission.
The regulatory move and the formation of a crypto watchdog in Europe has long been awaited since Facebook Libra announced the Libra project. However, not much has been unearthed during the COVID-19 pandemic situation.
Now, that the world is emerging out of the pandemic statements such as that of Valdis Dombrovskis, the vice president of the European Commission are now hinting towards a soon to be implemented regulatory framework since June 2020.
Crypto Watchdog in Europe to provide relief?
Per the independent media outlet, the draft carries a rather tailor-made regulatory framework keeping in mind the risk levels each cryptocurrency and digital currency poses. This is also expected to help the crypto watchdog in Europe to keep their energies and resources focused on the major threats while providing relief to others.
Apparently the draft is being pushed in the wake of national regulations being imposed from European members such as France and Germany. The draft aims to provide a single framework applicable across Europe and a single crypto watchdog in Europe enabled to take action without conflict of local interest.
The report explains that the said draft covers over 6700 cryptocurrencies and digital currencies. The draft also provides a compliance framework to the developers and ICO managers in order to ensure consumer safety and risk management. The approvals would now be directed at both national and international level.
Special provisions for the likes of Libra
It appears that the draft is coming hard on digital currencies backed by big corporations such as Libra. The “significant e-money tokens” as the bill describes them would have to face a stricter compliance and approval process.
The e-money token providers and issuers would be classified as credit institutions subject to approval from the European Banking Authority. This in turn makes the crypto watchdog in Europe’s operational duties a tad bit easier with an additional layer of protective laws. The European Commission is said to provide aid to the banking authority for compliance.
The European Banking Authority along with the crypto watchdog would be able to investigate, inspect and impose fines. The fines imposed would be as much as five percent of the annual turn over at the very least. In addition, based on the conditions, EBA can also impose double the base fine, total profit of the company and/or the losses avoided the e-money token.
While for user securities, as per the law for any e-money provider, the issuer would be bound to return 100 percent of the value to the customers upon request, while prohibiting interest-based gains for holders. Last but not the least, the said bill also proposes to charge a fee from the e-money token providers.