ECSDA welcomes inclusion of digital assets into current regulatory frameworks
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ECSDA welcomes inclusion of digital assets into current regulatory frameworks 24 March 2020Munich Reporter: Maddie Saghir
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The European Central Securities Depositories Association (ECSDA) has approved the inclusion of digital assets into the existing regulatory frameworks, following the European Commission’s (EC) consultation on crypto assets.
Incorporating digital assets into the regulatory frameworks will “inject trust and legal certainty”, according to ECDSA in its response to the EC’s consultation.
Additionally, the association said it will enable their quick adoption, address financial stability, consumer protection and market integrity needs.
ECSDA highlighted that current EU legislation, such as the Central Security Depository Regulation, is “technology-neutral and fit for purpose for investment tokens”.
The association stated: “It was built for achieving the goal of investor protection and mitigation of systemic risks, not to support a specific technology.”
It noted that these safeguards are relevant for servicing any type of assets, disregarding the underlying technology used.
In its response, the association said: “It was built for achieving the goal of investor protection and mitigation of systemic risks, not to support a specific technology. It provides for key safeguards enabling stakeholders, such as issuers, intermediaries and other service providers, to operate in a clear environment with limited risk.”
This comes shortly after industry participants recently expressed the need for regulation on digital assets that can be integrated with existing technology and processes to run properly in regulated environments.
Industry experts explained that this is so they can trust and align digital assets with the existing business.
In November last year, the International Securities Services Association also called on industry participants, including central securities depositories, regulators, custodian banks and central counterparties, to recreate universally recognised market standards and definitions for the emerging crypto world.
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