June 2, 2021
MacManus proposes tough regulation for crypto-assets

MacManus proposes tough regulation for crypto-assets

Sinn Féin Midland Northwest MEP Chris MacManus has proposed significant amendments to the EU’s proposed regulation of crypto-assets. He said his amendments would bring consumer protection and financial stability to the core of new EU rules. MacManus is Spokesperson on digital finance for the Left in the European Parliament.

MacManus said:

“In recent times we have seen the volatility of crypto-assets as their value see-saws in the markets. The EU has proposed regulation mainly in response to the planned emergence of so-called ‘stablecoins’- currencies run by Facebook or others that are linked to the value of the Euro or Dollar or other assets or currencies. These stablecoins are seen as having the potential to be significant enough to pose a threat to financial stability.”

“The forty-five amendments I have submitted toughen up the EU Commission’s proposals in a number of targeted ways. Under my proposals, all new and existing crypto-assets will require authorisation by a ‘competent authority’ like the Central Bank. Currently, currency founders simply have to deposit a white paper that outlines the cryptos’ purpose and technology, with no scrutiny whatsoever. These white papers, under my amendments, would also require a lot more detail and transparency.”

“Crucially, in deciding whether to grant authorisation the competent authority has to take into account the environmental and energy impact of the proposal. As we know, Bitcoin uses as much energy as Sweden or Argentina through its “mining”.”

The Midlands Northwest MEP also sought further customer assurances, “I am also seeking that all stablecoins, like Facebook’s proposed Diem, should be redeemable at face value for all holders. This will require them to hold capital equivalent to the value of their customer’s holdings in the stablecoin.”

“Further to this, I am also seeking that Crypto-Asset Service Providers, the middle-men, are better regulated and are obliged to act in the consumer’s interest at all times.”

MacManus concluded, “Taken together these proposals will help bring transparency and security to this emerging sector which criminals unfortunately abuse as we saw with the ransom demands made of the HSE for payment in Bitcoin. The EU is right to propose regulation, but it must be made stronger so that consumers and the stability of the economy are protected first and foremost.” ENDS

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