The Association for Financial Markets in Europe (AFME) believes that Europe has what it takes to be a significant player in the global crypto and blockchain ecosystem if only it establishes a common regulatory approach in the sector.
According to a new paper published by the association, the AFME put together five recommendations for the European Union (EU) to support a “supervisory convergence” across Europe, as the EU seeks to establish a concise policy for the crypto industry.
The AFME suggests that the EU should establish a pan-European crypto-asset taxonomy, as it would help create a common understanding and foster collaboration across nations in the region. Such rules will also provide greater regulatory certainty for participants using cryptocurrencies in cross-border settlements.
James Kemp, AFME’s managing director and head of technology, commented:
There has been a rapid rise in the development of crypto-assets […] however, to realize those benefits, it is increasingly important that crypto-asset regulation is coordinated at the regional and global levels to foster innovation while promoting financial stability and ensuring a level playing field.
The paper also recommended that the EU provides “clear expectations” for crypto-related firms on the process of issuing crypto-assets to existing and new investors.
Other recommendations stated in the paper include the application of activities-based and technology agnostic regulation, replicating existing rules in different sectors for the crypto industry, and making the convergence of regulatory frameworks with other global and regional initiatives a priority.
As per the paper, the AFME is hoping that its recommendations to the EU would help promote innovation and establish a level-playing field for all crypto-related firms while reducing the risks associated with cryptocurrencies for users.
As Coinfomania reported earlier this year, the Financial Action Task Force (FATF) published a guideline to help member nations in the regulation of the crypto industry.
