A European regulator has specified probable new rules for crypto asset service providers in a recent consultation paper that it prepared.
The European Banking Authority recently released a consultation paper on crypto asset service providers (CASPs). The paper mentioned the need to update rules on money laundering and terrorism financing for such providers. The European regulator said current European guidelines were insufficient to govern crypto providers.
It has given time till February 2024 for stakeholders to respond to the consultation. The European regulator also plans to merge the rules on such issues for both crypto firms and payment service providers.
“The draft guidelines highlight that a protocol’s architectures should be sufficiently robust to enable the transmission of information in a seamless and interoperable manner so that CASPs involved in the transfer chain can comply with the travel rule requirements,” said the European regulator regarding the interoperability of CASPs.
The crypto asset service providers would also have to use self-hosted addresses to obtain and hold information. It will help them monitor the crypto assets and transactions above a particular amount. The draft guidelines for CASPs will likely be a reality within December 2024.
In Europe, another development has emerged regarding fund tokenization in the United Kingdom. In a landmark moment, fund managers in the country will be able to tokenize funds. Officials of the Financial Conduct Authority (FCA) have also supported the idea of fund tokenization. A blueprint model prepared by the Financial Conduct Authority has shared details on it.
Fund tokenization, among other use cases, is how digital ledger technology could ensure transparency across the financial services industry. The FCA endorsing such initiatives is a sign of how crypto adoption has progressed steadily in the UK and the rest of Europe.
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