EUU, Alm.del - 2019-20 - Bilag 546: Notat og høringssvar vedr. svar på EU-Kommissionens offentlige høring om kryptoaktiver

Europaudvalget 2019-20
EUU Alm.del Bilag 546
Offentligt

Valdis Dombrovskis

Executive Vice-President for An Economy that Works for People and

Commissioner for Financial Services, Financial Stability and Capital

Markets Union

European Commission

MINISTER FOR INDUSTRY,

BUSINESS AND FINANCIAL

AFFAIRS

Dear Executive Vice-President Valdis Dombrovskis

The Danish government welcomes the opportunity to respond to the

European Commission’s consultation on crypto-assets in the European

Union. It is very timely that we proceed with setting out a common

framework on this important subject.

Overall, legislation on crypto-assets must first of all ensure an effective

consumer and investor protection. Preventing fraudulent activities and

ensuring market integrity is crucial to take into account in relation to

crypto-assets. Furthermore, such regulation should also consider the risks

of crypto-assets, including in particular those related to money laundering.

The regulation should furthermore strike the right balance to ensure

financial stability and at the same time allow for innovation.

Moreover, due to the fast-paced development of crypto-asset business

models, it is important that new legislation gives the necessary clarity for

consumers and financial actors.

In order to facilitate this, it will be necessary to establish a new regulatory

regime. Crypto-assets are cross border in nature and should thus be

regulated at a European level. At the same time, we should prioritize

amending current legislation, where it makes sense to expand the current

legislative framework in scope to include crypto-assets. This is the case

with e.g. the E-Money Directive (EMD2).

Level playing field

A common regulatory framework should ensure a level playing field

between traditional providers of financial services, such as credit

institutions, and other service providers not currently regulated, but using

crypto-assets as a financial product.

Ensuring a level playing field contributes to maintaining well-functioning

financial markets with the same degree of consumer protection, trust in

market functions and financial stability.

At the moment, crypto-assets can be designed to mimic financial products,

such as stocks, but still evade existing financial regulation and rules on

MINISTRY OF INDUSTRY,

BUSINESS AND FINANCIAL

AFFAIRS

Slotsholmsgade 10-12

DK-1216 Copenhagen K

Tlf.

Fax

+45 33 92 33 50

+45 33 12 37 78

CVR-nr. 10 09 24 85

EAN nr. 5798000026001

[email protected]

www.em.dk

EUU, Alm.del - 2019-20 - Bilag 546: Notat og høringssvar vedr. svar på EU-Kommissionens offentlige høring om kryptoaktiver

consumer and investor protection. It is crucial that any regulation on

crypto-assets mirrors the rules and requirements of existing regulation.

Future proof classification to address risks

The technology behind crypto-assets enables the creation of new business

models. These business models often have a high degree of

decentralisation and anonymisation that requires specific regulatory

approaches. It is therefore important that a classification of crypto-assets

distinguishes between the specific features of crypto-assets such as the

degree of decentralisation. Also, regarding

‘stablecoins’,

the underlying

type of stabilisation mechanism should be properly categorised and treated

accordingly.

It is essential to focus on all relevant risks involved. A distinction between

subtypes of crypto-assets such as so-called

‘stablecoins’, ‘payment

tokens’,

‘investment tokens’ and ‘utility tokens’,

based solely on the

economic function of the crypto-asset, will overlook the risks connected to

the specific features of crypto-assets. This would incur a wide range of

adverse results in the longer term.

Enforcement

Another point of importance relates to the question of determining the

responsible legal subject. In existing financial regulation, the provider of

the financial service is often defined as a legal subject of said regulation.

This is a major issue for crypto-assets where the technology behind such

assets can make the identification of a legal subject increasingly difficult

due to the inherent potential for decentralisation and anonymisation. As a

case in point, an issuer of a crypto-asset can detach itself from the

management of the asset after its issuance, by using a smart contract which

complicates the important issue of ensuring enforcement of the rules on

among other things consumer and investor protection.

As the areas mentioned in this letter likely illustrates, we find it necessary

to have sufficient clarity as to best handle the multitude of novel issues that

crypto-assets pose to ensure financial stability and thereby achieve its

potential for European citizens and companies alike.

Please find attached the specific replies to the consultation document. I

remain at your disposal should you have any questions or comments.

EUU, Alm.del - 2019-20 - Bilag 546: Notat og høringssvar vedr. svar på EU-Kommissionens offentlige høring om kryptoaktiver

Yours sincerely,

Simon Kollerup