The European Commission’s financial services commissioner says that any regulation imposed on the industry must be global in order to work.
The EU’s financial services chief has urged US policymakers to draw up sweeping new rules for managing crypto, warning that digital assets could pose a threat to financial stability if left unregulated.
Mairead McGuinness, the European Commission’s financial services commissioner, told the Financial Times that any regulation imposed on the industry would have to be global to work.
“We need to see other players legislating,” McGuinness said, referring to countries that are beginning to follow the EU’s lead in regulating cryptocurrencies, “perhaps differently, but with the same goal… we need to look at global regulation of cryptocurrencies.”
The Irish commissioner was speaking during a trip to Washington, D.C., where she met politicians at the heart of negotiations on Capitol Hill on how to regulate the industry.
She said she was encouraged by these meetings and believed that US politicians were “moving in the same direction” as those in the EU. But he added:
“There is a lot of concern at the European level as to [what would happen] if encryption was not regulated.There could be – in time, if they develop – financial stability problems. There are also investment issues regarding the lack of a clear field.”
The EU is recognised internationally as having one of the most comprehensive regimes on cryptocurrencies, in the form of a new set of regulations that has passed its final stage. These rules will govern everything from who can issue stablecoins to monitoring the environmental impact of the industry from 2024.
US President Joe Biden has also talked about the importance of regulating the crypto industry, but members of Congress are split on how to do it.
The Securities and Exchange Commission has taken an aggressive stance against exchanges, but the currencies themselves are still subject to very little oversight.
Those close to the negotiations say the two parties are still months away from reaching agreement on key issues, such as how to regulate the $150 billion market for stablecoins – a class of cryptocurrencies backed by real assets such as cash and short-term bonds.