Report with advice for the European Commission on crypto-assets

Summary

Crypto-assets are a type of private asset that depend primarily on cryptography and distributed ledger technology as part of their perceived or inherent value. Currently there is a wide range of crypto-assets including payment/exchange-type tokens, investment-type tokens, and tokens applied to access a good or service. The EBA, prompted by European Commission Vice President Dombrovskis, analyzed the applicability of current EU laws to crypto-assets. The results show that crypto-asset activity in the EU is limited and doesn’t pose financial stability risks. Most crypto-assets fall outside EU financial services regulation, with few qualifying as electronic money, and services like custodian wallet provision and trading platforms are unregulated. This leads to consumer protection, operational resilience, market integrity, and level-playing field issues. The EBA advises the European Commission to conduct a cost/benefit analysis to determine necessary actions and consider FATF recommendations to ensure consistency in accounting for crypto-assets. Additionally, the EBA will enhance monitoring of financial institutions’ crypto-asset activities and consumer disclosures in 2019.