The European Banking Authority, ESMA issues guidelines for the suitability of crypto entities.
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) jointly released two draft consultation papers on October 20. These drafts include an assessment of the eligibility of members of the governing body and shareholders or members with a stake in issuers of asset-reference tokens (ARTs) and crypto asset service providers (CASPs).
The proposed joint guidelines for assessing the suitability of shareholders or members, directly or indirectly, holding qualifying shares in ART or CASP issuers provide a common approach to assess the suitability of regulatory bodies. This includes authorizing the provision of ART and CASP and conducting prudential reviews for potential breakthroughs.
However, guidelines for evaluating the suitability of governing body members in ART and CASP issuing organizations provide standardized criteria for evaluating their knowledge, expertise, integrity, and ability to devote sufficient time to fulfill their responsibilities.
The directive aims to maintain integrity and foster trust in the cryptocurrency market and its associated services and reduce the possibility of regulatory disputes and arbitration, the consultation period will remain open until 22 January 2024.
Related: European Bank Authority calls for early approval of stablecoin standards
In anticipation of the upcoming rules, EU banking regulators have encouraged stablecoin issuers to voluntarily comply with specific “guiding principles” related to risk management and consumer protection. The EBA released an initial set of measures for public input on July 12 aimed at clarifying the requirements for markets in the Crypto-Assets Regulation, which will take effect on June 30, 2024.
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