The French regulators have proposed to change the way the cryptocurrency industry is supervised in Europe.
It has been reported that Robert Ophèle, the chairman of Autorité des Marchés Financiers, addressed crypto-related regulatory issues at the 5th Annual Conference on FinTech and Regulation.
However, the official argued that financial supervisors must take a new approach in regulating blockchain-based financial instruments due to massive growth in the market.
The report said that Ophèle proposed that the European Securities and Markets Authority (ESMA) should be the responsible authority for this new area of regulation and supervision.
Ophèle emphasized that the current stage of regulation in the European Union would make it easier for the ESMA to develop guidelines and policies.
“As this regulation is brand new, it is easier to provide ESMA with competence from the outset than if this is considered at a later stage. Moreover, it would make sense to gather all the expertise within the same authority, since the cost of entry in the crypto-world is quite high.”
Likewise, in early 2018, the ESMA issued a joint warning that cryptocurrencies were highly risky assets, warning investors not to “invest money they cannot afford to lose.”
Ophèle also suggested more enabling regulations, including a regulatory sandbox for the security token industry. The official said that current rules hamper the development of blockchain technology as they were designed for centralized systems.
Thus, Ophèle said:
“DLT would reduce risks, both by speeding up the market chain and by its distributed nature that could mitigate some cyber risks raised by centralised market infrastructures, such as the single point of failure […] It is also a question of keeping Europe competitive at a time when similar approaches are now being rolled out in many countries.”